Programme Management and Control Manual vers3 - · PDF fileProgramme Management and Control Manual ... PP Project Partner, corresponds to Lead Beneficiary/ Final Beneficiary

The Programme is co-funded by the European Union, Instrument for Pre-Accession Assistance (IPA)

Programme

Management and Control

Manual

(PMCM) Version 3

IPA Adriatic Cross-border Cooperation Programme 2007-2013

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LIST OF ACRONYMS AA Audit Authority

AF Application Form

AR Application for Reimbursement

BC Beneficiary Country

BL Budget Line

CA Certifying Authority

CBC Cross-border Cooperation

CC Candidate Countries

CF Cohesion Fund

DVE Declaration on Validation of Expenditure

ERDF European Regional Development Fund

EC European Commission

EU European Union

FAQ Frequently Asked Questions

FB Final Beneficiary

FLC First Level Controller

FLCO First Level Control Office

GoA Group of Auditors

IM Implementation Manual

IPA Instrument for Pre-accession Assistance

JMC Joint Monitoring Committee

JTS Joint Technical Secretariat

LA Lead Applicant

LB Lead Beneficiary

LP Lead Partner, corresponds to Lead Beneficiary

MA Managing Authority

MS Member State

NC National Co-financing

NUTS Nomenclature of Territorial Units for Statistics

OLAF European Anti-Fraud Office

PCC Potential Candidate Country

OP Operational Programme

PP Project Partner, corresponds to Lead Beneficiary/ Final Beneficiary

PRAG Practical Guide to Contract procedures for EU external actions

SME Small and Medium-size Enterprise

WP Work Package


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LIST OF VERSIONS

Number of the version

Date of the version

List of paragraphs modified

Vs. 0 27 July 2011 /

Vs. 1 26 July 2012

§ 3.4 Project changes

§ 3.4.1. Changes

§ 3.4.2. Substantial changes of the approved Application Form

§ 4.2 Public procurement

§ 4.4 State aid and “de minimis” regime

§ 4.7.3 Treatment of revenues

§ 5.1.General eligibility principles

§ 5.3.1. Staff costs

§ 5.3.4. External expertise

§ 5.3.7 Equipment

§ 6.1.1.1 Requirements for the costs to be reported

§ 6.1.2.2. Financial Report

Vs. 2 19 July 2013

§ 1.2 Regulatory framework

§ 3.4 Project changes

§ 3.4.1. Changes


§ 4.2 Public procurement

§ 4.2.1 In-house providing.

§ 4.4 State aid and “de minimis” regime

§ 4.8.2 Recovery of funds from closed projects

§ 5.1.2. Specific provisions for expenditure incurred outside the Programme eligible area

§ 5.2 Period of eligibility of expenditures

§ 5.3.3 Travel and Accommodation

§ 5.3.7. Equipment

§ 5.3.9 Financial charges and guarantee costs

§ 6.1.1.1. -Requirements for the costs to be reported - Conversion into Euro

§ 6.1.1.2 Timing for reporting

§ 6.1.2.2 Financial Report

§ 6.1.2.3. Attachments to the Progress Report (supporting documents)

§ 6.3.3 Programme reimbursement system

§ 7.2.3 Specific requirements for plaques and billboard

§ 8.1 Final Report

Vs. 3 3 July 2014

§ 1.2 Regulatory framework


§ 4.2.2. Derogation to rule of origin and nationality

§ 4.4. State aid and “de minimis” regime

§ 5.1.2. Specific provisions for expenditure incurred outside the Programme eligible area

§ 6.2.2.2. On-the-spot checks

§ 6.3.3. Programme reimbursement system

Annex I - Addresses of the First Level Control Office in each participating


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Number of the version

Date of the version

List of paragraphs modified

Country in the IPA Adriatic CBC Programme.


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TABLE OF CONTENT

1. INTRODUCTION .................................................................................................... 9

1.1. Terminology .................................................................................................................................... 10

1.2. Regulatory Framework ................................................................................................................. 13

2. PROJECT DEVELOPMENT AND CONTRACTING................................................... 14

2.1. Project Development ..................................................................................................................... 14

2.2. Objectives, expected results and outputs ................................................................................... 14

2.2.1. Indicators ....................................................................................................................... 15

2.3. The work plan ................................................................................................................................. 17

2.3.1. Project management and coordination activities ................................................... 18

2.3.2. Communication and Dissemination activities ....................................................... 20

2.4. The project budget .......................................................................................................................... 21

2.5. Contracting Phase ......................................................................................................................... 22

2.5.1. Partnership Agreement ................................................................................................ 22

2.5.2. IPA Subsidy Contract .................................................................................................. 23

3. PROJECT IMPLEMENTATION ............................................................................... 24

3.1. Project Start‐up .............................................................................................................................. 24

3.1.1. Partnership responsibilities and decision‐making structure ................................ 24

3.1.2. Establishing the audit trail system ........................................................................... 25

3.1.3. The kick‐off meeting ..................................................................................................... 27

3.2. Programme Management and Information System (M.I.S.) ................................................... 27

3.3. Project Monitoring ........................................................................................................................ 28

3.4. Project Changes .............................................................................................................................. 29

3.4.1. Changes ........................................................................................................................... 29

3.4.2. Substantial changes of the approved Application Form ....................................... 30

3.4.3. Administrative adjustments ....................................................................................... 32

3.5. Specific provisions for Associates ............................................................................................... 32

3.6. Programme website ....................................................................................................................... 32

4. COMPLIANCE WITH EU POLICIES AND OTHER RULES ..................................... 34

4.1. The principle of cost efficiency and transparency ..................................................................... 34

4.2. Public procurement ........................................................................................................................ 34

4.2.1. In‐house providing ........................................................................................................ 36

4.2.2. Derogation to rule of origin and nationality ........................................................... 37

4.3. Sub‐granting ................................................................................................................................... 38

4.4. State aid and “de minimis” regime ............................................................................................. 38


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4.5. Equal opportunities ....................................................................................................................... 40

4.6. Protection of the environment ..................................................................................................... 40

4.7. Other applicable rules ................................................................................................................... 41

4.7.1. Conflict of interest ........................................................................................................ 41

4.7.2. Double funding .............................................................................................................. 41

4.7.3. Treatment of revenues .................................................................................................. 41

4.7.4. Interest and equivalent benefits from pre‐financing .............................................. 43

4.7.5. De‐commitment of IPA co‐financing (n+3 rule) ...................................................... 43

4.8. Detection of unduly paid out expenditure, including irregularities ....................................... 43

4.8.1. Recovery of funds from running projects .................................................................. 44

4.8.2. Recovery of funds from closed projects..................................................................... 44

5. PROJECT EXPENDITURE AND APPLICABLE RULES ............................................ 46

5.1. General eligibility principles ....................................................................................................... 46

5.1.1. Overview of eligible and not eligible costs .............................................................. 47

5.1.2. Specific provisions for expenditure incurred outside the Programme eligible

area 48

5.2. Period of eligibility of expenditures ............................................................................................ 49

5.3. Eligibility of expenditure by budget line .................................................................................... 51

5.3.1. Staff costs ....................................................................................................................... 51

5.3.2. Overheads ...................................................................................................................... 54

5.3.3. Travel and Accommodation ........................................................................................ 58

5.3.4. External expertise .......................................................................................................... 60

5.3.5. Meetings and Events .................................................................................................... 62

5.3.6. Promotion costs ............................................................................................................ 63

5.3.7. Equipment ...................................................................................................................... 64

5.3.8. Investments .................................................................................................................... 67

5.3.9. Financial charges and guarantee costs...................................................................... 70

6. REPORTING, CONTROL AND REIMBURSEMENT ................................................. 73

6.1. Reporting Activity ......................................................................................................................... 73

6.1.1.1. Requirements for the costs to be reported .............................................................. 74

Budget limits .......................................................................................................................... 75

Conversion into Euro ............................................................................................................. 75

Display of figures ................................................................................................................... 75

6.1.1.2. Timing for reporting............................................................................................... 76

6.1.1.3. Voiding expenditure documents ............................................................................ 76

6.1.2. (Final Beneficiary) Progress Report .......................................................................... 77 6.1.2.1. Activity Report ....................................................................................................... 78

6.1.2.2. Financial Report ..................................................................................................... 78


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6.1.2.3. Attachments to the Progress Report (supporting documents) ................................ 79

6.1.2.4. Submission of the Progress Report ........................................................................ 79

6.1.3. Project Progress Report ............................................................................................... 80 6.1.3.1. Submission of the Project Progress Reports .......................................................... 81

6.2. Validation of expenditure ............................................................................................................. 82

6.2.1. The different control levels .......................................................................................... 82 6.2.1.1. The First Level Control .......................................................................................... 82

6.2.1.2. On-going controls by the Managing Authority/Joint Technical Secretariat .......... 82

6.2.1.3. Other Programme actors involved in control ......................................................... 83

6.2.2. Procedure for expenditure’s validation ..................................................................... 83 6.2.2.1. Administrative verification (desk-based checks) ................................................... 85

6.2.2.2. On-the-spot checks ................................................................................................. 86

6.2.2.3. The Declaration on Validation of Expenditure (DVE) .......................................... 86

6.3. Reimbursement ............................................................................................................................... 88

6.3.1. Pre‐financing payment ................................................................................................. 88

6.3.2. Submission of the Application for Reimbursement ................................................ 89

6.3.3. Programme reimbursement system ............................................................................ 90

7. PROJECT COMMUNICATION AND VISIBILITY ..................................................... 93

7.1. Strategy and content of the Project Communication plan ...................................................... 94

7.2. Basic information on project communication and visibility tools ....................................... 96

7.4 Publicity Requirements ...................................................................................................................... 99

7.2.1. Use of European flag and Programme logo .............................................................................. 100

7.2.2. Disclaimer ..................................................................................................................................... 101

7.2.3. Specific requirements for plaques and billboard ..................................................................... 101

7.2.4. Specific requirements for project equipment ............................................................................ 102

8. PROJECT CLOSURE ........................................................................................... 103

8.1. Final Report .................................................................................................................................. 103

8.2. Durability and ownership of the project outputs ................................................................... 104

8.3. Storage of project documents and accounting records ........................................................... 104

8.4. Other considerations ................................................................................................................... 105

8.4.1. Costs for project closure ............................................................................................ 105

8.4.2. Revenues after project closure .................................................................................. 105

Annex I ..................................................................................................................... 106

Annex II .................................................................................................................... 107


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LIST OF FIGURES Figure 1: Reporting procedure at Final Beneficiary and Project level .............................................. 74 Figure 2: Progress Report procedure ................................................................................................. 80 Figure 3: Validation Procedure Chart ................................................................................................ 85 Figure 4: Reimbursement procedure .................................................................................................. 92


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1. INTRODUCTION

The Programme Management and Control Manual (hereinafter PMCM) provides detailed information on

the development, the implementation and closure of the projects within the IPA Adriatic CBC Programme

(hereinafter Programme).

The PMCM is one of the Programme’s documents specifically devoted to the project implementation, mainly

to the eligibility of expenditure, their reporting and payment, and, then, is aimed at providing further and/or

complementary information on provisions laid down in:

o the IPA Adriatic CBC Operational Programme

o the Implementation Manual

o the Applicants’ Manual and the relevant Call for proposals1

o Guidance for First Level Controllers.

Specifically, the PMCM is developed in order to ensure a common understanding of the relevant rules and

the requirements for all actors involved in every stage of project’s management and control, from the

development through contracting, implementation, reporting and verification of expenditure, up to closure of

the project.

Then Final Beneficiaries of all projects financed by the IPA Adriatic CBC Programme will find in this PMCM

all the necessary information in order to ensure that all expenditure incurred during the implementation of

projects can be validated on safe grounds and projects can be effectively implemented.

Whereas some chapters explain compulsory Programme requirements, others intend to set a harmonised

baseline for all participating Lead Beneficiaries and Final Beneficiaries in order to ease their common

working culture.

In particular, this document describes:

(i) rules and suggestions for the project development and management (chapters 2 and 3);

(ii) rules on eligibility of expenditure and procedures (chapters 4 and 5);

(iii) Final Beneficiaries’ duties and responsibilities in every project phase, such as financial and

technical reporting, verification procedures and reimbursement (chapter 6);

(iv) rules on communication and visibility activities (chapter 7);

(v) procedures for project closure (chapter 8).

The content of the PMCM applies then to all projects financed within the IPA Adriatic CBC Programme

both to ordinary projects and strategic projects.

The information herewith provided will be, whenever required, further developed and updated during

Programme implementation. An ad-hoc assistance will also be provided to Final Beneficiaries by the Joint

Technical Secretariat on an on-going basis also through training seminars.

1 In case of strategic project in the relevant Call for proposals or Terms of Reference.


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1.1. Terminology2

A wide range of terms that may create problems in understanding the documents are listed below. Even if

not covering them all, a general glossary of the most common terms used when dealing with financial control

matters is herewith presented:

Application for payment

Document submitted by the Certifying Authority to the European Commission in order to claim IPA contribution.

Application for reimbursement

Document submitted by the Lead Beneficiary to Managing Authority in order to claim reimbursement for expenditure (fully or partially) incurred in the implementation of the project on the basis of the Declaration/s on Validation of Expenditure issued by the First Level Controllers.

Audit

The term “Audit” is used for the second level audit performed by the Audit Authority (Group of Auditors) or by external auditors on behalf of the Audit Authority in compliance with Art. 105 (1 a, b) and 107 of Regulation (EC) No 718/2007. Second level audit covers the verification, on a sample basis, of already validated and approved project expenditure.

Audit trail The documentation kept by every partner that proves how all funds have been spent.

Audit Authority

Auditing officers of Abruzzo Region institution appointed for auditing the expenditures and the control system of the Programme, in accordance with Article 105 of the Commission Regulation (EC) No. 718/2007. It collaborates with the national auditing officers within the Group of Auditors.

Certifying Authority

Accounting officer of Abruzzo Region institution appointed for certifying the expenditures of the Programme, in accordance with Article 104 of the Commission Regulation (EC) No. 718/2007. In compliance with Article 4 (6) of the MoU, it is in charge of certifying and reimbursing the technical assistance expenditures to the Final Beneficiaries, as well as receiving the unduly amounts recovered by the Managing Authority.

Control

Verifications carried out at level of Beneficiary’s Country, covering administrative, financial, technical and physical aspects of projects. Verifications shall ensure that the expenditure declared is real, that the products and services have been delivered, and that the projects and expenditures comply with relevant Community and national rules.

Control system

System established to validate the expenditure of the Lead Beneficiary/Final Beneficiary at national level, according to Article 108 of Regulation (EC) No. 718/2007).

Declaration on Validation of Expenditure (DVE)

Document issued by the National First Level Control Office containing the amount of verified and validated expenditure of a Progress Report submitted by a Final Beneficiary. By signing this document, the First Level Controllers declare the legality and regularity of the expenditure according to Community and national rules.

Final Beneficiary/Beneficiary/Project partner/partner

Body or firm, whether public or private, responsible for initiating or initiating and implementing projects. In the context of aid schemes, final beneficiaries are public or private firms carrying out an individual project and receiving public aid.

First Level Control Office (FLCO)

National controllers designated in each Participating Country for carrying out the First Level Control on the expenditures.

2 Main source: ”Territorial Cooperation Objective - Financial Management Handbook” published by INTERACT.


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Irregularity

According to Art. 2. of Reg. (EC) 718/2007, an irregularity is defined as ‘…any infringement of applicable rules and contracts resulting from an act of omission by an economic operator3 which has, or would have, the effect of prejudicing the general budget of the European Union by charging an unjustified item of expenditure to the general budget.’ In practical terms this means any act or conduct that affect the eligibility of expenditure – whether deliberately or accidentally.

Joint Technical Secretariat (JTS)

Expert team charged to assist the Programme bodies in the management and Programme implementation.

Lead Beneficiary/Lead Partner

One of the Final Beneficiaries responsible for ensuring the implementation of the entire project.

Lead Applicant

One of the potential Final Beneficiaries (FB) of a project appointed by the other potential FBs to submit the project proposal. It will be Lead Beneficiary, in case of approval.

Managing Authority

Authorising officer of Abruzzo Region institution appointed for managing the Programme, and, in case, the recovery of unduly paid amounts, in accordance with Article 103 of the Commission Regulation (EC) No. 718/2007.

Agreement on shared implementation (Memorandum of Understanding-MoU)

Agreement concluded between the Programme Participating Countries and the Programme Authorities in compliance with Article 118 of the Commission Regulation (EC) No. 718/2007.

Partnership Agreement

Is the contract concluded between the Lead Beneficiary and the Final Beneficiaries. It determines the rights and responsibilities of the Lead Beneficiary and the Final Beneficiaries.

Project Management Information System (MIS)

Web-based multi-user system for the management and control activities within the Programme.

Progress Report

Dossier referred to the “Activity Report”, that provides information on the achievement of Project’s results and outputs, and to the “Financial Report”, which provides information on Project’s expenditure, and the related Annexes as documents of evidence on the incurred expenditures. It is submitted to the FLCO for the expenditures validation.

Project Progress Report and Final Report

Documents submitted by the Lead Beneficiary, according to its contractual obligation, in order to regularly report the entire project progress proving that the implementation is in accordance with the approved Application Form and justifying the reported and validated expenditures relating to the activities carried out and the outputs, results delivered.

Real costs

The whole system of payments is based on this principle. Projects can only claim amounts that they have really been charged (amounts ‘incurred’) and can only claim them to the Programme after these amounts have actually been paid out.

Recovery

Process leading to claim and get back from project partner expenditure already reimbursed by the Programme bodies but which has been incorrectly (or ’unduly’) paid out. The amount to be recovered can be deducted from following payment claims submitted during project implementation or it can also be requested when the project is already closed.

3 To be understood as any Final Beneficiary (including Lead Beneficiary) participating in an approved project.


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IPA Subsidy Contract

Is the contract concluded between the Lead Beneficiary – who represents the partnership in general – and the Managing Authority after project approval specifying the conditions upon which the Community and National contributions are granted for supporting the Project.

Validation of expenditure

Result of the verifications carried out by the First Level Control Offices in order to verify the legality and regularity of the expenditure reported by the final beneficiary/lead beneficiary.

Verification Process of first level control in order to issue the Declaration on Validation of Expenditure.


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1.2. Regulatory Framework

The IPA Adriatic CBC Programme has been designed under the objectives of the cross-border cooperation

of Instrument for Pre-accession Assistance (IPA CBC), thus the Programme shall first and foremost be

administered according to the regulations of the IPA Instrument.

The main reference documents for the Programme Management and Control Manual are:

‐ Council Regulation (EC) n. 1085/2006 of 17 July 2006 establishing an instrument for pre accession

assistance (hereinafter “IPA Regulation”) and following amendments and integrations;

‐ Commission Regulation (EC) n. 718/2007 of 12 June 2007 implementing Council Regulation (EC)

no. 1085/2006 establishing an instrument for pre-accession assistance and following amendments

and integrations (hereinafter “IPA Implementing Regulation”);

‐ IPA Adriatic CBC Operational Programme;

‐ IPA Subsidy Contract (the one applicable for the Call for Proposals under which the project was

financed);

‐ Commission Regulation (EC) No 1828/2006 has also to be taken into consideration where recalled

(by Art. 13, setting out rules for the national control on expenditures, as called by Art. 103 (1), point

c) of IPA Implementing Regulation (hereinafter “EU Control Rules”);

‐ COMMISSION REGULATION (EU) No 1407/2013 of 18 December 2013 on the application of

Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid4;

‐ Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October

2012 on the financial rules applicable to the general budget of the Union the financial rules

applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No

1605/2002;

‐ Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of

application of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council

on the financial rules applicable to the general budget of the Union;

‐ COMMISSION DECISION C(2013) 1171 final of 5.3.2013 repealing Decision C(2007) 2034 on the

rules and procedures applicable to service, supply and works contracts financed by the general

budget of the European Union for the purposes of cooperation with third countries.

Besides, it is suggested to consult the applicable Community and National legislation, not expressly recalled

in this document.

Moreover, Guidance for First Level Controller forms an essential part of the reference corpus.

4 COMMISSION REGULATION (EC) No 1998/2006 of 15 December 2006, applied until 31.12.2013.


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2. PROJECT DEVELOPMENT AND CONTRACTING

2.1. Project Development

Every project is different, but all projects start from one idea developed in order to achieve specific objectives

with defined but limited resources and within a scheduled time-frame.

Hence the main stages of project development can be synthesized as follows (not necessarily in the order

below):

‐ defining the objectives, results and outputs

‐ building the partnership

‐ constructing the work plan/activities

‐ setting up realistic budget and timeframe.

It is stressed that the projects financed by the IPA Adriatic CBC Programme principally need to comply with

the specific Programme’s and Calls of reference’s requirements.

Therefore, the information given in the next sub-paragraphs will relay only on some general aspects of the

steps listed above and are intended to be additional to the ones contained in the relative Call and Applicants’

Manual, providing practical guidance and advice for Lead Applicants and potential Final Beneficiaries on

some aspects of the developing project idea mainly to have clearly in mind what to do in order to plan

adequately the needed resources.

2.2. Objectives, expected results and outputs

The most important step in developing the project proposal is to define the objectives and the expected

results clearly and precisely since the beginning of the development process. ‘Good’ objectives and results

clearly express what kind of changes and effects the project intends to bring about.

Generally speaking, the objective specifies positive aspects of a desired future situation to be reached.

According to what actually needed in the Project Application Form (AF), objectives are defined at two distinct

levels:

- general objective is the expectation and the effects/benefit of the project in the long-term on

beneficiaries’ territories and for Programme’s area beyond the specific project purpose and the

temporary funding received;

- specific objectives are what the project is going to achieve concretely at the end of the project lifetime.

What are the changes produced in the field tackled and on the project target groups.

Both of them must be concrete, quantifiable and realistic, thus it can be useful in defining them to answer to

the following questions:

‐ what type of change/s is/are going to be achieved in the short and long run?

‐ where shall the change/s happen?

‐ for whom is it going to be done (project target group/s)?

‐ by when does it have to happen?

The expected results are direct and immediate advantages resulting from the project’s activities and from

the production of the outputs, they are the effects to which the outputs lead to and tell us about the benefit of

funding the outputs. Compared to outputs, results imply a qualitative value, even if they should also be

measured in concrete units (see below the § 2.2.1 Indicators). When planning the project results, the

partnership can reach a common understanding answering the following questions:


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‐ What kind of positive change does the project aim at?

‐ Where will the change happen?

‐ Who will be affected by the change?

‐ When will the change happen?

‐ What should be the quality of the planned result?

‐ What is the cross-border value of the result?

In addition, a project should define also outputs, which, practically, tell us what has actually been produced

with the money given to the project. The project outputs are tangible deliverables and visible products of the

project directly resulting from the activities carried out in the project (e.g. manuals, specific centres opened,

events, and so on). They are typically measured in concrete units (see below the § 2.2.1 Indicators). When

planning the project outputs, the partnership can reach a common understanding answering the following

questions:

‐ What is the content of the outputs (e.g. database, action plan)?

‐ Who will be using the outputs (e.g. database) after the project?

‐ Who will be participating (e.g. in the network) after the project?

‐ How will the outputs (e.g. database, action plan, network) be used after the project?

When submitting the Application Form, both the defined results and outputs should be measured by indicator

targets (target value), which define the level of achieving to be reached respectively for results and for

outputs. The realization of the defined indicators will be taken into consideration to monitor the project

performance, thus projects should indicate a realistic unit for the defined results and outputs that are likely

that the project can achieve.

2.2.1. Indicators

The indicator targets set by a project in the Application Form define its level of ambition, help to monitor

progress throughout implementation and allow to say at the end of the project whether the objectives have

been achieved.

Therefore, the definition of the outputs and results indicators requires a special attention5. The table below

shows some (not exhaustive and only for illustration purpose) examples of indicators set respectively for

outputs and for results:

Output Indicator

(immediate result of the project)

Results Indicator

(effect/consequence of the immediate result)

Number of regional seminars on biomass held

Number of biomass policies improved/implemented

Number of participants to one-week study tour on technological transfer

Number (percentage) of cross-border SMEs with improved capacities in technological transfer

Number of ports modernized with facilities Number (percentage) of increased voyagers in Adriatic

All indicators should be expressed in quantity (such as ‘the number of’, ‘percentage of’) in order to be able to

measure results and outputs objectively, but they need to be completed by qualitative aspects (such as

addressed target groups, in which place the change is produced). In case it is measured something that

5 For more information about indicators, please refer to the following source: Commission Working Document No. 2 on indicators at: http://ec.europa.eu/regional_policy/sources/docoffic/working/sf2000_en.htm.


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already exists (number of people employed in an area) or project is built on the results of a previous project,

the baseline figure (the starting value) will not be zero, thus the starting point should be defined.

To set a good indicator system at a project level, the indicators should also be S.M.A.R.T, which means:

‐ Specific: is it clear what exactly will be measured, in what geographical area measurements will be

made, what units (number of participants, euros, kms etc.) will be used etc.?

‐ Measurable: will the project be able to collect accurate information to measure progress towards the

targets set? The information required for measurements should be quite easy to collect. It should be

aware that different regions and Countries collect data in different ways, thus all partners should be

able to monitor and report on the indicators selected.

‐ Achievable: closely linked to identifying what changes are anticipated as a result of the project work

and whether the results planned are realistic (e.g. decrease in water pollution by XX rather than no

water pollution);

‐ Relevant: will the indicators measure all of the project’s key activities?

‐ Timed: stating when something should happen (e.g. increase in visitor numbers by the end of the

project).

It is noted that it is not always easy for projects to set up a correct and clear indicator systems. Firstly, in

many cases there is confusion between outputs and results indicators. Secondly, many of the indicators

cannot be measured because sometimes no baseline information was provided, sometimes no relevant data

are available and often indicators are too vaguely defined or not logically linked (e.g. investing in a specific

output should lead to a specific result and not to another one).

Therefore the definition of the project indicator system is very important and should be not underestimated

by the partnership, which shall agree in what exactly needs to be achieved by the project since the

beginning. As well as everything else in the application, indicators should be identified by all project partners,

under the coordination of the Lead Applicant. All the partners should:

- discuss the choice of indicators, who among them will contribute to the different indicators,

- identify the baseline data to benchmark the progress achieved,

- consider whether other projects are working on similar issues and whether there is an opportunity to

use some of their indicators and build on their work (avoid repetition).

Active involvement of all partners in the setting up of project indicators during the development stage

facilitates partner performance throughout the implementation stage and outlines the division of

responsibilities from a very early stage.

Last but not least, the project indicator system chosen by the partnership shall also be consistent with the

Programme’s indicator system. The IPA Adriatic CBC Programme has a number of core indicators on Priority

level distinguished by result and outputs. They will serve to assess whether Priority objectives are being met.

Each project therefore needs to demonstrate a clear contribution also to the Programme’s indicator system

of the Priority which the project refers to.

During application process, the project will be required to point out results and outputs indicators

according to both those defined by the Programme and to those chosen specifically for the projects

reflecting the specific activities and aims.

At the Programme level, through the periodical Project Progress Report, information about the achievement

of the outputs and results by the projects will be collected in order to measure progress on all important

project activities and aims and, finally, verify how all different projects are contributing to achieve the

Programme’s objectives. The success of the Programme is connected to the success of the financed


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projects, in other words, if projects will achieve their objectives, and reach their targeted results and outputs

indicators, even the Programme will achieve its objectives.

Finally, just to sum up, in order to develop a project indicators system consistent with project objectives and

activities and outputs and also with the Programme, the partnership can consider the following points as

guide:

Checklist for defining indicators

Consistent with Programme:

- What are the Programme’s indicators specific for the related Priority?

- Which of these indicators will the project contribute to?

- Will the project make a direct contribution to the Programme/Priority indicators?

Consistent with the project objectives:

- Are envisaged results related to project objectives?

- Is there a logical flow between objectives/activities and results

- Are results clearly defined, realistic (achievable) and precisely quantified according to the project objectives?

Nature of the envisaged outputs:

- What should be produced by the end of the project?

- What type of outputs is the project going to deliver – soft (e.g. network establishment) or hard (on the ground implementation work)?

- Can you provide quantitative or qualitative measurements for output? If the indicators are qualitative have you secured a methodology to assess the progress made?

- At what level, local, regional, national, international, the outputs will be produce?

Target groups: - Do the selected indicators identify specific target groups?

- Are there indicators measuring involvement/degree of influence of the project?

Each project is asked to find best suitable indicators fitting to the particular planned results and outputs of the

project. These indicators should even help the projects to evaluate their performance and achievements by

themselves at a given stage. In fact the defined indicators developing the project may also require

adjustment during the implementation phase due to external conditions. At the end of the project, in case the

set targets will not be reached, an explanation should be given in the Final Report (see § 8.1 of PMCM), but

this does not automatically mean that the project has failed.

2.3. The work plan

Another important step in developing project proposal is the construction of the work plan.

A well-structured work plan should help a project to organize its activities, having a clear and detailed

understanding of the actions listed, their duration, their dependencies and their sequence applying a cross-

border approach.

In the Application Form, all projects are asked to describe their activities specifying also the involvement of

the partners. The work plan defined in the Programme’s Application Form is structured in different Work

Packages (WPs). Each Work Package enables the project to break down its work in actions, easily grouped

according to WP’s focus.

There are three pre-defined Work Packages in the Application Form. The following sub-paragraphs will give

to the project partners useful information in order to elaborate two of them: the “Project management and

coordination” work package and the “Communication and dissemination” work package.


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2.3.1. Project management and coordination activities

In a broad sense “project management” concerns coordination of project’s activities, monitoring and

reporting of project progress in terms of activities and resources.

Moreover project management regards also the definition of the management structures necessary to

implement the project activities (such as the human resources’ team and the project’s decision making

body), the methods to be used to ensure a proper information flow among partners (internal communication),

and the method for internal evaluation and accounting system.

Management structures

Since the project developing phase, the partnership should agree on the decision making process and (if

possible) should envisage a project’s decision making body such as a project’s steering committee, or

management board, or an advisory group.

Irrespective of its name, such a committee, which should guarantee an adequate representation of all

partners, will be the main decision making body during the entire project lifetime and thus it will oversee

strategic planning, coordination, monitoring, evaluation and achievement of outputs/results (see § 3.3 of

PMCM).

The role and the responsibility among the partners should be agreed on and clearly defined by the partners

all together. It is recommended that the coordination and management procedures remain as transparent

and simple as possible.

Project team

The management of a cross-border project is a challenging and time-consuming task. Therefore it is

suggested that the human resources devoted to the project should have experience in the management of

previous projects (such as in cross-border cooperation or other international projects), be able to handle the

challenges of different languages and cultures, and should enable the partnership to work together as a

team.

Each partner can appoint (internal or external) specific human resources to carry out the project activities.

However the Lead Beneficiary, which will have the responsibility to ensure an efficient and reliable

management and co-ordination system for the whole project, should appoint (internally) or contract

(externally) a project coordinator and a financial manager.

The project coordinator (or project manager) is the person responsible for co-ordinating the whole

project’s work among the involved partners, for ensuring that tasks are fulfilled according to the scheduled

timeframe, the foreseen resources and the division of responsibilities among partners; for monitoring the

progress of the project; for ensuring proper information flow with the Programme bodies, as well as with and

among the project partners. In practice, he/she should be able to act as a driving force in the partnership in

order to achieve smoothly the project’s objectives.

The project financial manager is the person responsible for an adequate and orderly project accounting,

for properly financial managing of the total budget and for monitoring financial progress of the project.

The project coordinator and the financial manager should work in close contact with each other, with the

partners’ organizations and with the Programme’s bodies in order to establish effective project management.

They should cooperate mainly in preparing and submitting the Project Progress Report (project activity and

financial reports)6 to the Managing Authority/Joint Technical Secretariat. Since the Programme official

language is English communication with the Managing Authority/Joint Technical Secretariat must be in

English and thus it is strongly recommended that these persons are familiar with English.

6 Refer to § 6.1 for further information on Project Progress Reports.


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Information flow between the partners

It is important to envisage a good communication flow among partners agreeing on means, modality and

timeframe for the internal communication since the beginning.

The main subjects of the internal communication within the project are:

‐ to share information that partners need in order to work together,

‐ to inform constantly about project progress,

‐ to identify problems and overcome them if necessary,

‐ to take decisions on project changes (if needed).

When teams are working together over long distances between different Countries, good internal

communication flows are important. Good in this context means that information needed for working together

has to be shared among all partners and to be concrete, clear and timely during the project lifetime.

Insufficient communication can easily lead to conflicts and problems; too much information or irrelevant

information can, on the other hand, make confusion.

Therefore to ensure a good communication flow in a complex, multinational and long-distance environment

as in the cross-border cooperation projects, the following aspects should be kept in mind:

‐ a clear language, that is also easy to understand for non-native speakers, should be used (being the

language of the Programme, English is suggested);

‐ vague messages should be avoided and it is preferable to be as concrete as possible;

‐ in case of using technological means, all partners have to get the technical access/capacity and the

skills to use these tools without creating extra work for others.

The project meetings remain the basic pillar to guarantee an effective communication within the project as

moments to afford vis a vis the management and coordination tasks and to build up a certain level of

confidence and trust. There are different views on what the “ideal” frequency of project meetings is. Surely

only one meeting per year would not be enough; some projects find appropriate to meet every three months,

others every six months. This choice depends on the size of the project in terms both of funding and of

number of partners. It should be taken into account, however, that although large partnerships can benefit

from more frequent meetings to communicate on a “face to face” basis, at the same time, it is difficult to

arrange meetings for a large number of people to be available on a certain date. The number and frequency

of the project’s meetings should be decided early on, also in order to plan correctly the needed resources.

The basic meetings to be arranged are the kick-off meeting, interim meetings (to discuss progress, reporting)

and the final meeting (to evaluate outputs and initiate project closure). The results of meetings are to be

documented and communicated to all partners as minutes and specific decisions taken to address

issues/problems.

A way to reduce the need for physical meetings, which can be more timely and costly, is to use video-

conferences. It is however stressed that while they are extremely useful, they cannot replace the basic need

for face-to-face meetings for some key occasions (for example, the kick-off meeting).

As mentioned above, projects can envisage the use of technological means to facilitate the communication

activities among partners, mainly the day-to-day work. In this respect, while phone, fax and e-mail are the

most commonly used tools, such cross-border cooperation projects often may have a need for additional,

more sophisticated technologies that can support collaboration. The implementation and use of such

systems should be planned well (including financial resources and time for their set-up) in order to ensure

benefit for the project and not creating extra work for partners’ organizations. The use of technological tools

and devices can improve the working efficiency of the team. For instance it could be useful to envisage an

online storage of documents, which is a good way to ensure that all partners have easy access to the latest


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information and documents, templates, etc. It could be useful to use also shared internet-based work spaces

for collaboration among team members. These are often a combination of storage and management

platforms, which can be highly valuable for teams working together over long distances.

The possible management and coordination outputs indicators that projects can plan may be the following

(not exhaustive list):

‐ number of steering group meetings organized by project;

‐ number of videoconferences (if any) organized by project;

‐ number of Project Progress Reports produced;

‐ number of interim evaluations.

2.3.2. Communication and Dissemination activities

A separate Work Package (WP2) devoted to group all communication, dissemination and publicity activities

is foreseen in the Application Form. During the project preparation stage, it is important to plan those

activities and the financial resources needed for them.

External communication and information of project results to key stakeholders and target groups are

essential to make the project visible as widely as possible. In some projects this can be a quite complex

process as different target groups need to be approached in different ways. External communication involves

many aspects, but in general it is about everything relating to the project’s appearance to the ‘outside world’.

Therefore the following aspects should be clear in advance:

‐ What needs to be communicated and to what level of detail?

‐ Who needs to be informed?

‐ When and how often they need to be informed?

‐ How they should be informed? What is the most appropriate medium?

In general, concerning the “who should to be informed”, projects need to reach a wide range of media and

stakeholders, including representatives from all levels of government, as well as the wide public. Depending

on the objectives, the project partners shall identify relevant addressees, such as (list not exhaustive):

‐ relevant stakeholders

‐ policy makers at regional, local and national level

‐ general public

‐ specific media

‐ European Commission

‐ Programme bodies.

Concerning ‘how” the above mentioned target groups may be reached, the possible communication outputs

and relevant indicators that the projects can plan may be the following:

‐ Number of public events advertising the projects organized by the project and number of expected

participants at these events

‐ Number of newsletters issued and/or downloaded online

‐ Number of printed publications distributed

‐ Number of brochures/flyers produced

‐ Number of public events advertising the projects attended by project representatives (excluded the

ones organized by project)

‐ Number of TV/radio/web streaming broadcasts


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‐ Number of articles in international/national/regional/local press (newsletters, magazines etc.)

‐ Number of connections to the project website.

Moreover, it is strongly recommended to envisage the definition of a more detailed project’s communication

and dissemination strategy in a communication plan, to be drawn up as soon the project starts in respect

also of the Programme publicity rules7.

In case specific skills and expertise are necessary to make sure that communication activities are carried out

as professionally as all the other WPs, a skilled information/communication manager, who should preferably

speak English, may be appointed, planning appropriately the needed financial resources.

The communication manager is the person in charge for the implementation of the communication plan, for

the coordination of all the communication and publicity activities in accordance with the EU and

Programme’s requirements on information and communication and visibility of actions. In case no specific

person will be appointed/contracted, the communication tasks can be carried out by other persons involved

in the project, for example, the project coordinator.

In order to make the project more visible and to ensure the transparency of the activities and results, projects

are recommended to set up a website and to regularly update it during the project lifetime.

2.4. The project budget

It is vital that projects start to consider financial issues from the very beginning. Every planned activity

needed to meet the project objectives should be budgeted. All partners should be involved in this process

and it is important to include also a realistic budget for the Lead Partner’s project administration role.

Obviously this requires preparatory work (including meetings when possible) during the development of the

project application. Time invested in the developing phase, brings to construct a strong partnerships with

clear responsibilities and well-justified budget allocations. Moreover consistently good preparation is the

main factor for a smooth and successful project implementation.

An estimation of the funds potentially available can be an important factor in defining the scope of the project

and all partners need to take responsibility for their own budgeting.

There is a three-step process that should provide the right level of accuracy: Resource planning, Cost

estimating and Cost budgeting. These steps form the basis for cost control once the project is operational.

Resource Planning

First of all, project partners have to get a clear idea of what they want to achieve and how they plan to do it.

Then they have to break this down into work packages and decide what is needed for completing each work

package. It is particularly important to think about how different work packages fit together: the work of one

partner often depends on the delivery of another partner’s work, thus possible delays should be estimated

and considered into the time plan.

Cost Estimating

Project partners should have a reasonable accurate picture of what will happen over the course of the

project and then try to work out how much it will cost, developing an approximation of the costs of the

resources needed to complete project activities. Some costs are reasonably easy to calculate. For example,

you will know the number and type of staff required and the standard salary for this type of staff. Other costs

are more difficult to be identified. For example, if you plan a pilot activity based on the results of initial

research carried out by the project it will be impossible to know exact costs at the beginning. The best

approach is to define a realistic maximum price for the activity.

7 Please refer to chapter 7 for further details.


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Cost Budgeting

Project partners should know the main activities, which partners will carry them out, the estimated start and

end dates and the approximate resources (and therefore budget) required. The final step involves re-

organising these figures to show the main categories of spending into the Project “budget lines”, the partners

that will spend the funds and on which year this will happen, which is the most important part of the

agreement between the partnership on how the project is going to be implemented.

When developing the project budget, Lead Partner and its Project Partners are even encouraged to develop

a more realistic project budget and spending plan from the start, since evaluation of project spending

patterns in the previous INTERREG Programme showed that most projects were too optimistic about their

spending profiles during the first reporting periods and that they needed to prolong their projects in order to

complete their activities and spend their budget.

In order to avoid that the IPA co-financing may be lost, if it has been not claimed timely and fully by the CA to

the European Commission, the following experiences could be useful:

o the spending rate of an average three years project is lowest at the beginning of the project, because

at the early stage the project focuses on planning and preparation activities. The spending increases

towards the end of the implementation phase, where it reaches its highest level;

o higher spending rates, especially at the beginning, are appreciated, but they can only be fulfilled if

the project implementation is speeded up right from the start. For this purpose, the key staff for

project coordination should be available shortly after the project starting. Also a kick-off meeting and

detailed project planning meetings should preferably be arranged soon after the project approval;

o the Lead Partner must control that each project partner strictly follows its spending provision

according to the approved Application Form and to the IPA Subsidy Contract, in order to keep the

project financial performance at least constant.

2.5. Contracting Phase

When the projects are finally selected for funding, the contracting phase starts and the Managing Authority

concludes and signs the IPA Subsidy Contract with every Lead Applicant of funded projects.

Since the signing of these contractual arrangements, the Lead Applicants will be considered the Lead

Beneficiary and will take on the responsibilities for the whole project towards the Managing Authority.

Before signing the IPA Subsidy Contract (SC), the Lead Beneficiary (LB) has to conclude a Partnership

Agreement with all other projects Beneficiaries.

The Managing Authority with the support of Joint Technical Secretariat will provide clarification to all legal

questions related to the contracting phase. The Applicants’ Manual of the relative Call for proposals provides

the specific requirements to be fulfilled before the signature of these documents.

2.5.1. Partnership Agreement

According to the IPA Implementing regulation (Art. 96.1 let. a), Lead Beneficiaries shall conclude a

Partnership Agreement with their project partners. The Partnership Agreement contains a clear definition of

responsibilities among partners and provisions for guaranteeing the sound financial management of the

funds allocated to the project, including the arrangements for recovering unduly paid amounts and the

transferring of the Community contribution from the Lead Beneficiary to the other partners. The Lead

Beneficiary is the sole responsible for the whole project towards the Managing Authority. Therefore, the

Partnership Agreement signed with all other Beneficiaries allows the Lead Beneficiary to extend the rules

and responsibilities set out in the IPA Subsidy Contract to the level of each partner and mainly to share


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common understanding of the implications of participating in the project both in terms of activities and

financing.

The IPA Partnership Agreement form, available from the Programme’s website, shall be filled in with the

project specific information and, if necessary, with additional provisions which will be checked in advance by

the Managing Authority (with the support of the Joint Technical Secretariat) in order to verify that they are not

in contrast with the EU regulations, Programme provisions and the contracting rules.

The signature of the Partnership Agreement by all project Beneficiaries is a prerequisite to sign the IPA

Subsidy Contract thus it shall be sent to the Managing Authority as soon as signed.

In case during the implementation, some changes in the project will occur which may affect the content of

the Partnership Agreement, an Addendum to the Partnership Agreement would be drawn. This Addendum

must be signed by the Lead Beneficiary and the other project Final Beneficiaries and must be sent to the

Managing Authority. The modification will enter into force when the addendum will be authorized by

Managing Authority.

2.5.2. IPA Subsidy Contract

The IPA Subsidy Contract (to which the “General conditions of the IPA Subsidy Contract” is annexed) is the

contract entered into between the Managing Authority and the Lead Beneficiary of approved project. It sets

out the obligations and rights of the contracting parties and constitutes the main agreement between the

project and the Programme Authorities. The IPA Subsidy Contract determines the rights and responsibilities

of the Lead Beneficiary, on one side, and of the Managing Authority, on the other side, the reference to the

activities to be carried out, terms of funding, requirements for reporting and financial controls. It represents

the framework of reference for the implementation of project activities.

Before the IPA Subsidy Contract's signature, the Managing Authority, on the basis of risk assessment, may

require to the Lead Beneficiary or to a single Final Beneficiary - except public Final Beneficiary - to provide

an adequate financial guarantee on Community contribution assigned in order to limit the financial risks of

the unrecovered amount. The guarantee shall be provided by an approved bank or financial institution

established in one of the European Member States or Participating Country to the Programme, if that bank or

financial institution offers equivalent security as the one offered by a bank or financial institution established

in an European Member State. In this case, the guarantee shall be annexed to the IPA Subsidy Contract.


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3. PROJECT IMPLEMENTATION

3.1. Project Start-up

Projects should be ready to start implementation according to the starting date envisaged in the approved

Application Form (AF).

Several steps should be taken at the beginning:

- setting up project team and decision-making body;

- establishing the audit trail system;

- drafting a communication plan (recommended)8;

- holding the kick-off meeting.

These steps (not necessarily in the order above) should be taken by the Final Beneficiaries according to their

tasks and responsibilities.

It is important that these aspects are clarified and scheduled in order to have a management structure for

running the project since its early beginning.

3.1.1. Partnership responsibilities and decision-making structure

According to the Article 96 of IPA Implementing Regulation, the Lead Beneficiary of a project is appointed by

the Final Beneficiaries among themselves, firstly for submitting the project proposal and, then, for being

responsible for the implementation of the entire project.

In general, the Lead Beneficiary shall assume the following responsibilities:

‐ it shall lay down the arrangements for its relations with the Final Beneficiaries participating in the project in an agreement (Partnership Agreement9) comprising, inter alia, provisions guaranteeing the sound financial management of the funds allocated to the project, including the arrangements for recovering amounts unduly paid;

‐ it shall be responsible for ensuring the implementation of the entire project and support the Final Beneficiaries in carrying out the overall project implementation in accordance with the programme documents and the pertinent EU regulations;

‐ it shall be responsible for transferring the Community contribution to the final Beneficiaries participating in the project;

‐ it shall ensure that the expenditure presented by the final Beneficiaries participating in the project has been paid for the purpose of implementing the project and corresponds to the activities agreed between the final Beneficiaries participating in the project;

‐ it shall verify that the expenditure presented by the final Beneficiaries participating in the project has been validated by the controllers (FLCO).

In particular, within the IPA Adriatic CBC Programme, in order to ensure the implementation of the entire

project, the Lead Beneficiary has to:

‐ set up an efficient and reliable system for the project management and co-ordination (incl. administrative and financial management), also appointing a Project Manager to act as a driving force in the partnership and to mobilize the partners to achieve the project objectives10;

‐ continuously monitor project progress ensuring that the project stays on track;

‐ produce regular Project Progress Reports (by 31st October and 30th April) on the entire project11;

8 See § 2.3.2 of this PMCM. 9 See § 2.5.1 of PMCM. 10 See § 2.3.1 of PMCM.


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‐ inform MA/JTS in right time if any change occurs and submit all necessary requests for modifications12;

‐ produce a Final Project Report at the end of the project13.

On the other hand, every Final Beneficiary (Lead Beneficiary included) has to assume several

responsibilities:

‐ to collaborate with the Lead Beneficiary and all other Final Beneficiaries to guarantee the correct

implementation and the success of the project; the FB should nominate a contact person for

communicating with the other partners and with project manager/LB;

‐ to carry out its own part of the work as defined in the project Application Form, to monitor the

progress of the part of the project which it is directly responsible for and to make sure that the project

implementation under its responsibility is carried out in accordance with the programme documents

and the pertinent EU regulations;

‐ to agree on and to apply the requirements and obligations as defined in the Partnership Agreement;

‐ to maintain either a separate accounting system or an adequate accounting code for all transactions

relating to the project;

‐ to produce regular Progress Reports on its implemented activities and expenditure;

‐ to keep available all its documents related to the project for at least a period of 3 years following the

closure of the IPA Adriatic CBC Programme.

According to what stated in the Application Form14, for the successful management of the partnership and

completion of the project, as soon as the project starts, the partnership shall set up (if possible) a project joint

decision-making body. Such Steering Committee (or advisory board, steering group) is responsible for

monitoring the implementation of the project overseeing the strategic planning, coordination, monitoring,

evaluation and achievement of outputs/results15.

3.1.2. Establishing the audit trail system

The audit trail is an instrument the Lead Beneficiary and all the Final Beneficiaries shall put in place since the

early beginning of the project in order to ensure the “self-control” during the implementation of the project.

It is extremely important since it allows a clear and objective traceability of project’s declared expenditures

and revenues and relevant related documents. It can be in fact described as the records that show how the

funding of the project has been spent. Although accounts can be kept in Euros or in the Final Beneficiary’s

national currency, all project reports have to be filled in and accounted in Euros only.

The audit trail should include the information/documents related to:

o original invoices (or documents of equivalent probative value) of all declared expenditures and

related payment proofs;

o administrative supporting documents adopted for public procurement procedures: tenders, contracts,

administrative procedures;

o clear description of the accounting evidence, related to the specific budget lines;

o certifications related to validated expenditure (DVEs);

11 See § 6.1.3 of PMCM. 12 See § 3.4 of PMCM. 13 See § 8.1 of PMCM. 14 See § 2.3.1 of the PMCM. 15 See § 3.3 of the PMCM.


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o procedures: IPA Subsidy Contract and, Partnership Agreement (and the possible changes to them

authorized by the competent bodies), Progress Reports, relevant project correspondence, etc;

o main correspondence on approval, implementation, modifications of the project;

o correspondence/verification of the receipt (and transfer for the LB) of IPA funds.

In order to clearly and easily identify, verify as well as properly monitor and manage the project related

expenditure and revenues, for all transactions related to the project without prejudice to national accounting

rules, the Lead Beneficiary and all Final Beneficiaries should:

o open a specific bank account in euro for project payments, if possible, or foresee a separate project

code to identify project related transactions;

o maintain a separate accounting system or an adequate accounting code, in order to clearly trace

project costs/revenues by budget line, activity and payment date/reporting period in the accounting

system;

o indicate the project title/acronym directly on the invoices/equivalent documents and on all supporting

documents.

The bank account details shall be communicated to the Managing Authority when required, using the

specific form (“Bank account Identification notice”) provided by the JTS. Any change of this information

should be communicated as soon as possible and, mainly for the Lead Beneficiary, when submitting the

Application for Reimbursement16, since the reimbursement of IPA grant will be executed only on the bank

account of the LB communicated to the MA/JTS. Complete and correct bank information in fact can ensure

fast transfer of the funds.

Experience shows that the international BIC (S.W.I.F.T. code) as well as the international IBAN code were

major sources of errors. Therefore LB are very much encouraged to ensure that the BIC (S.W.I.F.T.) and/or

the IBAN codes are correct and do not contain any space characters. Moreover, the name, address, town

and Country of the bank and the account holder should be given.

Concerning the separate accounting system or accounting code, it may either be an integrated part of

the Final Beneficiary’s regular accounting system or additional to that system. In any case, the chosen

system shall be run in accordance with the accounting and bookkeeping policies and rules that apply in the

Country where the final Beneficiary is established. Hence the Beneficiaries can set up a “project accounting

system” by using separate accounting system for the Project concerned or by ensuring that expenditure and

revenues for the activity concerned can be easily identified and traced to and within the Final Beneficiary’s

accounting and bookkeeping systems thanks to a specific and adequate accounting code.

Finally, a correct audit trail foresees:

o a separate archive filled in by each project partner with all original documents related to project’s

(financial and administrative) implementation;

o all partners shall keep the documents linked to the project until 31st December 2021 or longer if

foreseen at national level or according to the de minimis applicable rules;

o project specific cost-accounting analytical code/s in order to clearly trace project costs, activity and

payment date/reporting period in the Beneficiary’s accounting system17;

o copy of relevant documents sent to the Lead Beneficiary.

16 See § 6.3.2 of the PMCM. 17 Final Beneficiaries may also use the “Expenditure Identification Code” (EIC) provided by the M.I.S. for each expenditure included in a Progress Report.


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3.1.3. The kick-off meeting

The first partnership meeting is the so called kick-off meeting, which should be preferably arranged within the

first starting months to ensure that all the partners share the same project vision and are ready to start the

implementation of the project without delay.

The kick-off meeting is an important moment for project. All partners should take part in and some partners

may meet and know for the first time. It aims to establish confidence and trust. It is also a stage to launch the

management and coordination process, to confirm objectives and the implementation plan, to define

communication strategy (for instance to agree on the communication plan) and agree on the composition of

the team. Depending of the agenda, this meeting can usually take one/two day/s and usually it is arranged

by the Lead Beneficiary.

3.2. Programme Management and Information System (M.I.S.)

The Management and Information System of the IPA Adriatic CBC Programme (hereinafter referred to as

MIS) is a multi-user system, developed specially for the needs of the Programme. It is based on a web

technology that allows the users to have access to it from wherever they are, with an Internet connection and

a browser.

The M.I.S. is then the common Programme integrated system for the whole Programme area which permits

to manage the information related to:

o the Programme and its configuration;

o project’s submission;

o Final Beneficiaries being members of a project;

o expenses made by Final Beneficiaries of financed projects;

o certification of expenditures (Declaration on Validation of Expenditures) and related Application for

Reimbursement;

o multi-level controls of expenses;

thus allowing the recording and keeping of the accounting data as well as the financial management, control,

checks, audit and evaluation of each Project approved within the framework of the Programme (Ordinary and

Strategic).

The Managing Authority will provide all users with an “User Account” (user name and password) to enter

into the MIS18. Then, users can access to the M.I.S. through the “Reserve area” in the web site of the

Programme () or directly through this link: https://sso.adriaticipacbc.eu/gestionale .

The MIS permits, to Final Beneficiaries, to fill in Progress Reports (PR) and Application for Reimbursement

(AR) via Internet access and at the same time to save, to store and to print Progress Reports, Declaration on

Validation of Expenditures (DVE) and Application for Reimbursement19. At the same time it allows a direct

communication within the whole monitoring system (FLCO, MA/JTS, AA, CA).

Additionally, the M.I.S. provides updated information on Progress Report status (under preparation,

submitted, need integrations, approved, rejected), besides speeding up the payment process, since the

collection of the validated expenditures that could be reimbursed into a single Application for Reimbursement

can be started by the Lead Beneficiary right after the online submission of the DVE.

18 Final Beneficiaries involved in more projects will be given a single “User account” through which they can access to all the different projects they are involved to. 19 For more information about PR, DVE and AR refer to § 6 of the PMCM.


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Finally, through the MIS it is possible to monitor the financial progress of the project, seeing the planned

amounts, the previous reported amounts, current reports as well as accumulated amounts, besides having

all the information about project budget by partners and by budget lines20.

Technical and useful information for Final Beneficiaries for using the MIS are provided in the guidelines

produced by JTS: “Guidelines for the use of the Programme Management and Information System -

M.I.S. (Instruction on how to submit Progress Reports and Applications for Reimbursement)”21

available on the Programme website.

3.3. Project Monitoring

The Lead Beneficiary is responsible to ensure the quality of the project implementation by monitoring and

reporting on the project’s progress. In order to ensure effective and efficient management of the project, the

LB shall set up a proper procedure for monitoring the achievements of milestones and outputs as well as the

project spending. It is the responsibility of the LB to follow up and to assess the quality of Project Partners’

achievements and to have an overview of the overall progress of the project.

The Lead Beneficiary may be supported in this by a project’s coordination group (generally called Steering

Group/Committee). Generally, this coordination group should be responsible for monitoring and steering the

project in order to meet the targets/objectives set in the project application. If necessary, the Steering

Group/Committee handles with the changes of the project implementation (see following § 3.4).

The Steering Group/Committee should be composed of representatives of all project partners (and if

necessary of the representatives of the key stakeholders according to the project content). The number of its

members is related to the number of project partners.

The Steering Group/Committee bears no legal responsibility towards the IPA Adriatic CBC Programme

management structure or the project partners, since the Lead Beneficiary is the only responsible and

accountable structure in relation to the Managing Authority. This is due to the fact that the IPA Subsidy

Contract is signed only by the Managing Authority and the Lead Beneficiary.

This being said, all projects are anyway subject to monitoring, regarding both the progress of the project

activities and the financial implementation.

The main instruments for the project monitoring are the Project Progress Reports, since on the basis of

these reports the Joint Technical Secretariat monitors the implementation of the projects. By monitoring the

progress of the projects the Joint Technical Secretariat wants to help the projects to achieve the best

possible output for the benefit of the IPA Adriatic CBC Programme area. At the same time, they are a tool for

the Lead Beneficiary to follow the activities and costs occurred among the project partners. Additionally to

the Project Progress report, also the Progress Reports, produced at partner level, allow the Lead Partner,

FLCO and MA/JTS to examine the progress of the project22. It should be noted that a good report does not

include only the success factors but gives a balanced view of the project. This includes, of course, reporting

the success factors, but also the lessons learnt and what did not work, problems arisen and how they have

been overcome. In this way, the reporting is useful for both the project itself and the Programme.

Additionally, the project monitoring includes also how the funding of the project has been spent, thus Lead

Beneficiary and the other project partners must ensure that a good audit trail has been put in place and that

20 Through the “Expenditures statistics” section of the MIS. 21 The JTS has even prepared a guideline for FLCOs “Guidelines for the use of the Programme Management and Information System - M.I.S. (Instruction on how to issue a DVE)” available on the Programme website too. 22 See § 6.1 of the PMCM.


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all accounting documentation related to the project is filed separately and that all project related payments

have a clearly distinguishable book-keeping code23.

After the approval of the project, each project will be assigned a contact person in the Joint Technical

Secretariat, who is in charge to follow the project progress and also to support the Lead Partner in the

project implementation. The Joint Technical Secretariat also has the right to ask for any additional

information or material at any time.

3.4. Project Changes

The project should be kept as much as possible identical to the one defined in the Application Form (AF).

However, the planned project activities are based on assumptions made at the time of the AF submission but

conditions may be changed or be unknown: no matter how good the planning is, there can always be some

variation.

During implementation, in some cases the possibility to have project changes is allowed in order to adapt the

project to real context/situation that the final Beneficiary has to deal with.

In general, the changes can be distinguished in:

- changes, which DO NOT have a relevant impact on the main results, outputs and objectives of the

project; they require a detailed written request to MA/JTS justifying the changes;

- substantial changes, which HAVE a relevant impact on the main results, outputs and objectives of

the project; they require a detailed written request to MA/JTS justifying the changes as well, but the

approval/not approval by the Joint Monitoring Committee (JMC) is needed.

Specific obligations about project changes are established in the IPA Subsidy Contract and its General

Conditions (and their amendments) and shall be respected as well.

As a general rule, requests for project change which do not require the JMC approval, according to art. 17.2

of the General Conditions of the IPA Subsidy Contract, can be submitted up until the final date of

eligibility of expenditure (see § 5.2), thus within one month after the ending date of the implementing

period of the project. The Lead Beneficiary is anyway recommended to submit the request for project

changes before the last date, since the time necessary to process the modification request will not extend

the final date of eligibility of expenditure, or the deadline for submission of closure documents.

Instead, requests for project changes which have to be authorized by the Joint Monitoring Committee can be

submitted no later than 2 months before the ending date of the implementing period of the project.

Derogations to this general rule will be assessed case by case.

For the submission of any project change, Lead Beneficiaries must follow the instructions provided in the

“Project changes pack” available in the “Project Management Toolbox” of the Programme website.

3.4.1. Changes

The allowed changes concern budget changes (between budget lines, between Work packages (WP))

and/or activities changes, and sometimes they can be interrelated, for instance a change in activities/work

plan can imply budget changes24. These kinds of changes DO NOT have a relevant impact on the main

results, outputs and objectives of the project as laid down in the Application Form (AF).

23 See § 3.1.2 of the PMCM. 24 It is highlighted that not only the percentage of budget changes is substantial to define if a project change is minor or substantial, but how the changes will affect the nature of the project as it was when approved. For instance, in a project, it can be requested to move budget from one budget line to another (or from one WP to another) equal to 5% of the project budget but nevertheless should it modify the results/objective of the project considerably, it would be considered


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Any request for these changes has to be well justified and submitted by the LB to the Managing Authority in

a written form. In case the changes are related to the part of activity and/or budget of one or more Final

Beneficiary/ies, the Lead Beneficiary must attach to the request sent to the MA/JTS also the request made

by the Final Beneficiary/ies to the LB. In the case that the changes initiated only by the LB affect other

project Final Beneficiaries, again their request/consent is needed prior to sending the request to the MA, and

they have to be informed on the decision as soon as the request is processed.

The request for changes has to be submitted signed and stamped by the LB legal representative/authorized

person in paper version at any time during the year25.

Once the LB’s request for change is received by the MA, the MA will, with the support of the JTS, evaluate if

the change needs also the JMC’s approval. If the JMC’s approval is not needed, the modification shall be

deemed to be accepted and will enter into force if within 30 days from the receipt of the request no

observation is raised by the MA/JTS.

In case the changes will affect the content of the IPA Subsidy Contract and of the Partnership Agreement,

addenda to them will be issued to Lead Beneficiary accordingly.

The Beneficiary can use the "expenditures statistics" section in the Management and Information System

before submitting the budget change’s request in order to verify if the planned changes are possible and in

line with its needs. In fact this feature of the M.I.S. allows to have an overview of the costs already

reported/validated/reimbursed and to see from which budget lines it is possible to move funds26.

3.4.2. Substantial changes of the approved Application Form

In very exceptional cases, the following substantial changes can be possible:

- changes in the partnership composition;

- changes in the content of the project;

- budget shift from one Final Beneficiary to another/others on the condition that the total Programme

Contribution does not change;

‐ budget reallocation between budget lines and/or work packages exceeding 20% of the project

budget;

‐ extension of the project duration.

In all these cases the LB shall submit an official request to the MA/JTS giving a detailed justification.

The request will be evaluated by the JMC whose decision will enter into force only after the formal

notification sent by the Managing Authority to the LB. In case of approval, the IPA Subsidy Contract and

if relevant, the Partnership Agreement will be amended accordingly.

Only two substantial changes per year could be submitted by the LB to the MA/JTS. Derogations to this

general rule could be admitted only in exceptional cases.

Changes in the partnership composition

as a substantial change in the content of the project. Generally speaking, it is expected anyway that budget changes exceeding the 20% of the total project budget may substantially modify the nature of the project. 25 The “Request for Project Change” (word) template is available in the Project change pack published in the Programme website, whilst the Project change (excel) form will be provided to the Lead Beneficiary upon request to the JTS, being customized for each project and for each request of modification. 26 In order to better understand how this section of the MIS works, it is recommended to consult the “Guidelines for the use of the Programme Management and Information System - M.I.S. (Instruction on how to submit Progress Reports and Applications for Reimbursement)” available in the Programme website.


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Change in the partnership is a sensitive modification of the approved project since the partnership

represents an important aspect for the implementation of the project and for the achievement of project

objectives.

The following situations may occur:

a. Beneficiary withdrawal without being replaced by a new one;

b. Beneficiary withdrawal with replacement by a new Beneficiary.

In case (a), a Beneficiary withdraws for any reason from the project without being replaced, the other

Beneficiaries should take over fully or partly the responsibilities and tasks of the withdrawing Beneficiary.

The budget has to be also changed consequently. The Lead Beneficiary shall send a request to the MA/JTS

and provide it with information on the new division of work and, if necessary, also of the remaining project

budget of the withdrawing partner; the declaration of withdrawal (dated and signed by the legal

representative of the withdrawing Beneficiary) in which an explanation on the reasons for withdrawal is given

must be attached too.

In case (b) a Beneficiary withdraws and is replaced by a new Beneficiary, it is suggested, in order to

minimize the impact of the project, that the replacing Beneficiary comes from the same Country/region. The

Lead Beneficiary shall send a request for change to the MA/JTS providing the details on the new Beneficiary

that will join the project, the reasons for joining and which tasks will be taken over by the new Beneficiary.

Moreover the following documents must be annexed to the partner change request:

‐ Declaration of withdrawal, dated and signed by the legal representative of the withdrawing

Beneficiary in which an explanation on the reasons for withdrawal is given;

‐ original ‘Letter of Intent’ and ‘De minimis Declaration’ signed by the legal representative of the

organization wishing to join the project;

‐ all the supporting documents (such as Statute, final budgets...) necessary to verify the eligibility of

the new Beneficiary according to its legal status and what required by the reference Call for

proposals;

‐ the legal status notice and the Bank account identification notice of the new partner;

‐ data of the new Beneficiary and description of its institution, experience and role into the project,

according to the information provided into the “Beneficiary” Section of the MIS;

‐ a revised AF (sections Work plan and Budget).

In both cases, since the new Beneficiary (if any) and the new division of tasks are changes that may affect

the outputs and results of the project, the Lead Beneficiary must, in its request, demonstrate, that the

changes proposed will not jeopardise or change the objectives set in the project approved by the JMC.

Changes in the content of the project

Content-related changes that are resulting in modification of the main results and objectives of the project as

laid down in the Application Form (AF) are considered as substantial changes, independently of the fact that

they imply or not a budget modification.

Budget reallocation between Final Beneficiaries

If strictly necessary, Final Beneficiaries may also decide a different distribution of their Project budget

envisaged in the total financing plan of the Project approved by the JMC, provided that the total amount of

Programme contribution allocated to the Project will not be increased. In such a case, the Lead Beneficiary

must promptly inform the MA on the changes proposed by indicating the new distribution of the Project costs

and by justifying the new reallocation of the resources.


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Extension of the project duration

The extension of project duration can be requested only in exceptional and justified cases. The project

should demonstrate that unpredictable delays have occurred due to external conditions.

The extension is possible only for the total duration not for single WP/action and it may also concern the

cost-extension within the approved project budget. In case a WP is in delay, it will be seen as a normal

setback of the project, which will be explained by the LB/FB within the related Project Progress Report27 and

the MA/JTS will evaluate case by case the reasons of delay during the monitoring on the project progress

and, if necessary, will take the appropriate measures.

The modification of project extension can be requested under the following conditions (as ruled by Art. 18 of

the IPA Subsidy Contract):

(a) the LB provides a prior written request to the MA containing proper justification;

(b) the total duration of the Project implementation has not exceeded 4 years;

(c) the total duration of the Project has not exceeded, in any case, the 31st December 2016.

In any case, if the project implementation period ends on 31 December 2016, all payments must be

concluded within the same deadline.

3.4.3. Administrative adjustments

Any administrative adjustment of the Final Beneficiaries - such as contact information, the change of the

addresses - requires a written notification to the MA/JTS through LB, which can be sent also on occasion of

the submission of the Progress Reports by the Final Beneficiary; in case of changes of bank account of the

Lead Beneficiary may be also specified on the occasion of the submission of the Application for

Reimbursement.

3.5. Specific provisions for Associates

Associate may not require directly reimbursement for their expenditures. The travel and accommodation

costs, incurred for the participation in project meetings/events, shall be paid directly by any Final Beneficiary.

Thus the Final Beneficiary/ies sustain those expenditures and ask for reimbursement to the Programme

reported them under “External expertise” budget line. This means that the expenditures for the participation

of Associates in the project’s meetings/events are eligible provided that these costs are finally borne by any

partner institution officially listed in the Application Form. Should it not be possible to meet this requirement,

such costs cannot be considered as eligible.

Associate can not act as a supplier or be a sub-contractor in the implementation of the project.

3.6. Programme website

In the specific section of the Programme website “Implementation documents”, the JTS provides all the

templates that support standardisation of communication and data to be reported.

Namely, in this section Final Beneficiaries will find all the mandatory templates required in specific case and

also the suggested templates that can be used.

27 See § 6.1.3 of PMCM.


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In addition, should there be any amendments made to the PMCM due to legislative changes or other

requirements which influence implementation of already approved projects, they will be made available on

the official website of the IPA Adriatic Cross-border Co-operation Programme: www.adriaticipacbc.org


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4. COMPLIANCE WITH EU POLICIES AND OTHER RULES

4.1. The principle of cost efficiency and transparency

When partners purchase goods and services, the selection process must always respect the principles of

transparency and sound financial management of the public funds (besides equal treatment and non-

discrimination), even though no specific requirements have been set for purchases below Community and/or

national tendering thresholds.

Final Beneficiary must be in a position to demonstrate that it has, for all contracts, chosen the provider

respecting the principles of cost efficiency and transparency and ensuring there is no conflict of interests, but

it is up to the Final Beneficiary to establish how to follow them, taking into account the applicable legislation.

Basic standards to comply with the obligation of transparency are:

o advertising (e.g. means of advertising, content of advertising);

o contract award procedure (e.g. principles, contract award decisions);

o judicial protection (i.e. possibility to review the impartiality of the procedure).

The Final Beneficiary must clearly trace the tender procedure and retain the documentation in the event of

any control or audit. The offers must be received in writing and have to be properly documented. If it is

impossible to collect such offers, at least the activities undertaken in order to obtain them have to be

documented.

4.2. Public procurement

The purchase of goods and services, as well as the ordering of works is subject to procurement rules aimed

at securing transparent and fair conditions for competing on the common market and which should be

followed by the Final Beneficiaries when commissioning services, works or supplies to third parties. Rules for

selecting the provider differ depending on the object of the awarding contract as well as on its value.

In the framework of the IPA Adriatic CBC Programme, rules on public procurement are mandatory and have

to be respected also by private bodies.

According to Art. 121 of the IPA Implementing Regulation, the IPA Adriatic CBC Programme will follow the

contents of the “Rules and procedures for service, supply and works contracts financed from the general

budget of the European communities for the purposes of cooperation with third Countries”. Those provisions

shall apply in the whole area of the Programme.

On 25 October 2012 the European Parliament and the Council adopted Regulation (EU, Euratom) No

966/2012 on the financial rules applicable to the general budget of the Union and repealing Regulation (EC,

Euratom) No 1605/2002 (hereinafter referred to as the “Financial Regulation”) and on 29 October 2012 the

Commission adopted Delegated Regulation (EU) No 1268/2012 on the rules of application of the new

Financial Regulation (EU, Euratom) No 966/2012 (hereinafter referred to as the “Rules of application of the

Financial Regulation”). These two Regulations now make up the legal framework governing the procedures

for the award of grants and service, supply and works contracts financed by the Union and concluded for the

purposes of cooperation with third countries financed from the general budget of the European Union.

Pursuant to Articles 184 and 188 of the Financial Regulation, the rules and procedures applicable to service,

supply and works contracts financed from the general budget of the European Communities for the purposes

of cooperation with third countries are now enshrined in Title V of Part One and Title IV of Part Two of the

Financial Regulation and in Articles 260 et seq. of its Rules of application.

The rules governing the award of contracts, standard contracts and corresponding operational instructions

and the rules, standard contracts and operational instructions for grants awarded in the context of external


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actions are listed and explained in the Practical Guide to contract procedures for EU external action

(hereinafter referred to as “PRAG” and available in the following website:

http://ec.europa.eu/europeaid/work/procedures/implementation/practical_guide/index_en.htm) a revised

version of which was adopted by the Director-General of the Directorate-General for Development and

Cooperation – EuropeAid after the adoption of the Financial Regulation and its Rules of application.

Final Beneficiaries are suggested to consult the “PRAG” templates to implement in practice the Community

procurement rules for external actions. The PRAG templates may be used, but it is not an obligation. In the

case templates other than PRAG are used, they must be in line with the EU rules and regulations regarding

the public procurement applied to this Programme.

Final Beneficiaries may also consult the Practical Guide issued by Interact Programme regarding the “Public

procurement in the IPA cross-border cooperation programmes with EU Member State in shared

management”28.

According to the Programme rules, when the contract to be concluded does not exceed 20.000,00 EUR it

can be awarded on the basis of the "Single tender procedure", provided that basic principles relating to

procurement procedures such as checking compliance with eligibility rules (nationality rules), capacity to

carry out the contract and exclusion criteria are duly applied. Namely, the general eligibility principle that the

expenditure is reasonable, justified and in compliance with the requirements of a sound financial

management is to be respected.

In case expenditure for service and supply contracts is less than or equal to EUR 2.500 (unless differently

ruled by applicable national law), payments can be made by Final Beneficiaries against invoices or receipts,

without prior acceptance of a tender.

For more information, Final Beneficiaries may also refer to the “Guide on European Community rules for

awarding procurement contracts financed by the IPA Adriatic CBC Programme” and to the “Guidance on

public procurement procedure for awarding contract with a value up or equal to 20.000 EUR or a single

tenderer under certain circumstances”, both published in the Programme website.

In this respect, Final Beneficiaries have to be aware that First Level Controllers are asked to verify the

existence of evidence concerning the proper application of selection and tendering processes. This evidence

should be based on the positive outcome of checks concerning, among others:

o the appropriateness of the procurement method being used in accordance with the awarding

amount;

o the appropriateness of the selection and award criteria, the lack of confusion between both and the

use of the published criteria during the evaluation process;

o the compliance of these criteria with the fundamental principles of the EU Treaties (transparency,

non-discrimination, equal treatment);

o the adequateness of the level of advertisement of the tender;

o the lack of discriminatory technical specifications;

o the adequateness of the tender evaluation reports prepared by evaluation committees and the

existence of complaints submitted to the contracting authority by the excluded tenderers.

Final Beneficiaries are advised not to split the awarding of contracts in order to avoid stricter public

procurement procedures for the selection of a provider (e.g. a contractor might be assigned with the

elaboration of one part of a study and a different contractor is assigned with another part of the same study).

28 http://www.interact-eu.net/downloads/1909/Public_procurement_in_IPA_cross-border_cooperation_programmes_with_EU_Member_States_in_shared_management.pdf


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All cases must be anyway assessed on a case-by-case basis. Awarding separate contracts can be

necessary and justified, for example, if different expertise is required or if the contracts cannot be reasonably

combined for geographic matters or for reasons related to timing, thus Final Beneficiaries should prepare

solid reasoning for cases that look like splitting at first glance.

National FLCO will check all the Final Beneficiaries contract awards also paying attention on spotting the

potential cases of illegal splitting of the object of a tender. It also serves as a basis to start investigating if

there is sufficient reasoning for splitting of the object of the contract. The Managing Authority may also carry

out this check.

Expenditure incurred without respecting the public procurement rules are not eligible and thus cannot be

reimbursed by the Programme.

In order to permit to the Managing Authority to monitor if the implementation of operations is carried out

according to the public procurement provisions referred to in Article 121 of the (EC) Regulation No.

718/2007, for each awarded contract, Final Beneficiaries are even required to submit (see also § 6.1.2.3 of

this Manual) the “Contract Award Declaration Form”. For any awarded procurement contract not exceeding

20.000,00 EUR and higher than 2.500,00 EUR, Final Beneficiaries are invited to provide the “Single tender

procedure report” when reporting expenditure.

4.2.1. In-house providing

The in-house providing is a legal institution, mainly known within EU Member States, still not ruled by the law

and it consists of a modality to award contracts outside public procurement discipline.

Therefore, public procurement selection procedures for procurement contracts identified by the law in articles

266, 268 and 270 of the Rules of application of the Financial Regulation, do not apply to the in-house

providing.

In such cases, the provider to which the contract has been awarded “in-house” is a delegated (in the

meaning of “longa manus”) of the Final Beneficiary29.

Final Beneficiaries are reminded that the requirements deriving from the latest ruling in this matter by the

European Court of Justice30 imply that:

o the in-house provider is controlled by the contracting authority exercising on it a control analogous to

the one exercised over its own departments (“structural subordination”); and

o at the same time, it carries out the essential part of its statutory activities for the controlling authority

(“economical dependency”); and

o it is owned by the contracting authority and its capital IS NOT intended to be opened to private

parties in the course of the performance of the respective public contracts, even if the private partner

would have a minority share otherwise the analogous control doesn’t actually exist.

All the above mentioned three conditions shall be satisfied.

When the conditions for an in-house contracting are given, costs of the contracted company must always be

charged on a real-costs basis, thus without any profit margin, and be in compliance with all the eligibility

rules for expenses because it acts on behalf of the project Beneficiary and they should be charged and

reported under the budget line related to the specific expenditure31. The concerned Final Beneficiary shall 29 Judgement C-340-04 of the European Court of Justice of 11 May 2006 (Park-Brixen). 30 The judgments which represent milestones in the course of clarification of this exception are: judgment of the Court of 18 November 1999 in the case C-107/98, Teckal Srl v Comune of Viano and Azienda Gas-Acqua Consorziale (AGAC) of Reggio Emilia, ECR [1999], p. I-0812 and Judgment C- 26/03 of the European Court of Justice of 11 January 2005 (Stadt Halle). 31 As specified in § 5.3.1, in cases the in-house provider issues an invoice, including VAT, the costs of staff directly employed by the in-house provider must be reported under the “External expertise” budget line instead of “Staff costs”.


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provide to FLCO proof of expenditure (invoice or other probative document issued by the in-house provider

to the Final Beneficiary), voided according to what ruled in § 6.1.1.3, and the related proof of payment to the

in-house provider. In addition, the invoice must be accompanied by detailed reports or any other means

giving evidence that costs are charged on a real costs basis without any profit margin. Upon request, all

documents supporting the related expenditure incurred by in-house company (e.g. payslips, timesheets,

plane tickets, etc.) should be made available to the FLCO.

Please note that the exception of the in-house providing is really a sensitive issue. Final Beneficiary that is

going to entrust a controlled body must check the fulfilment of all necessary requirements prior to awarding

contracts from an in-house perspective, due to the fact that an infringement of the public procurement

procedure has negative financial effect.

4.2.2. Derogation to rule of origin and nationality

According to art. 19 of EC Regulation 1085/2006 supplies and materials purchased under a contract

financed under this Programme must originate in the Community or in one of the countries eligible for

external aid (art. 19, paragraphs 1 and 2 of the same Regulation). Tenderers must then state the origin of the

supplies in their tenders. Additionally, according to the same article, tenderers must be nationals of one of

the above mentioned eligible countries and must then state, in their tender, the country of which they are

nationals by presenting the proof of nationality usual under their national legislation. This rule does not apply

to the experts proposed by the service providers taking part in the calls for tenders or in the service contracts

financed by the grant, who may be of any nationality.

Consequently, all tenders must satisfy the rule that the goods to be supplied and the materials to be used for

the construction fulfill the requirement of the IPA CBC Programme.

When submitting its tender, the tenderer must then self-declare the country(ies) of origin of the goods

provided, stating expressly if the goods meet the requirements concerning origin or not.

The supplier may be requested to provide documents supporting the stated origin. In this case, the supplier

should provide a certificate of origin or additional information considering that the issuing authority may

refuse to issue at tendering stage a certificate of origin without presentation of commercial invoices.

According to article 1 of the European Commission Decision C(2011) 3740, in exceptional cases the

derogation from the rule of origin can be approved by the Managing Authority if justified on the basis of the

unavailability of products and services in the markets of the countries concerned, for reasons of extreme

urgency, or if the eligibility rules would make the realisation of the project or an action impossible or

exceedingly difficult. Such derogation may be required also for the nationality of providers in order to

authorise the participation in the procurement procedure of providers established in countries other than

eligible Countries.

Requests for derogation to rule of origin or/and of nationality need to be submitted, by providing a motivated

explanation of the reasons for request (unavailability of products and services, extreme urgency,

impossibility or difficulty to realize the project or an action), of how far market research was conducted, of

why the realisation of the project/action would be "excessively difficult" and this could not have been

foreseen during project development and so on32.

Final Beneficiaries who need such derogation shall use the templates provided by the Programme and

available in the Programme website.

32 Final Beneficiaries may also consult the INTERACT suggestions at the following website: http://groupspaces.com/INTERACT_IPA_CBC/wiki/01-Derogation-to-the-rule-of-origin-span-style-font-family-Calibri-quot-sans-serif-quot-


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4.3. Sub-granting

In order to support the achievement of the objectives of the project, and in particular where the

implementation of the Project requires financial support to be given to third parties (which become sub-

beneficiaries), any Final Beneficiary may award sub-grants, if so provided for in the relevant Call for

Proposals provisions.

However, sub-granting may not be the main purpose of the Project and it shall be duly justified.

In addition, the following conditions for sub-granting must be respected:

o the activities envisaged by the sub-beneficiary do not increase the budget approved for the project

and they must provide an added value to the actions of the project partner;

o the sub-beneficiary cannot re-grant the received Programme contribution to other sub-beneficiaries;

o in any case, the maximum amount of Programme contribution that may be sub-granted by the Final

Beneficiary to its sub-beneficiary/ies is defined by Article 10, paragraph 3 of the General Conditions

of the IPA Subsidy Contract;

o the sub-grant shall be assigned by the Final Beneficiary following the same provisions set out in the

relevant Call for Proposals and in the IPA Subsidy Contract (eligibility of granters, selection

procedure, respect of State aid provisions...).

The reference Call for proposals may establish additional rules that have to be respected for the eligibility of

the sub-grant.

Finally, if not already foreseen in the Project Application Form, the sub-granting must be previously

authorized in compliance with the rules set out by the General Conditions of the IPA Subsidy Contract, after

a written request is sent by LB to MA/JTS.

For eligibility of expenditure, sub-beneficiaries must follow the same applicable rules for Final Beneficiaries

(see § 5) and the Final Beneficiary that has assigned the sub-grant shall report these costs according to the

general reporting procedures (see § 6). The concerned Final Beneficiary is then the only responsible towards

the Managing Authority and towards its Lead Beneficiary of the activities implemented by the sub-granter/s

and of the eligibility of the related expenditures.

4.4. State aid and “de minimis” regime

Free movement of goods, services and people is one of the basic principles of the European Union.

Therefore the objective of the EU State Aid policy is to ensure that free competition is not distorted and trade

among the Member States is not affected by public grants.

According to the Article 90.6 of the IPA Implementing Regulation “for State aid to enterprises in the meaning

of Article 87 of the Treaty, public aid granted under cross-border programmes shall observe the ceilings on

State aid”. It means that State aid rules must be applied under the IPA Adriatic CBC Programme both in

Member States and IPA Countries.

In order to meet the requirements of the European Commission and in order to allow a smooth

implementation of the Programme and its approved projects, in the IPA Adriatic CBC Programme framework,

State Aid are not permitted excluding the ones granted under the “de minimis” regime, according to the

EC Regulation on the de minimis aid33. This Regulation covers small amount of aid (“de minimis subsidies”)

which do not constitute State aid in the meaning of Art. 107 of the Treaty on the functioning of the European

Union (ex Art. 87 of the Treaty), and which are therefore not subject to the notification requirement. The rule

33 COMMISSION REGULATION (EU) No 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid which has replaced the COMMISSION REGULATION (EC) No 1998/2006 of 15 December 2006, from the 1st January 2014.


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is based on the assumption that the aid not exceeding a ceiling of EUR 200.000,00 over any period of three

years does not affect trade between Member States and/or does not distort o threaten to distort competition.

The total de minimis aid granted to any one undertaking shall not exceed EUR 200.000,00 over any period of

three fiscal years.

According to the Commission Regulation (EU) No 360/2012 of 25 April 2012 on the application of Articles

107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to

undertakings providing services of general economic interest, for undertakings providing services of general

economic interest the total amount of aid that can be granted under the de minimis rule is EUR 500.000,00

over any period of three fiscal years.

When an overall subsidy required by a Final Beneficiary acting as an undertaking into the project will exceed

this ceiling, that aid amount cannot benefit from the “de minimis” Regulation, even for a fraction not

exceeding that ceiling. In such a case, the benefit of this Regulation cannot be claimed for this aid measure

either at the time the aid is granted or at any subsequent time.

In accordance with the principles governing aid falling within Article 107 of the Treaty on the functioning of

the European Union, de minimis subsidies are granted at the moment when the legal right to receive the

subsidy is conferred to the undertaking (i.e. the date of the IPA contract signature). More specifically as ruled

under Art. 3.4 of the COMMISSION REGULATION (EU) No 1407/2013, de minimis aid shall be deemed

granted at the moment the legal right to receive the aid is conferred on the undertaking under the applicable

national legal regime irrespective of the date of payment of the de minimis aid to the undertaking.

Prior to granting the de minimis aid, the Managing Authority requires a declaration from the Final Beneficiary

which is acting as an undertaking into the financed project, in written, about any other de minimis aid

received during the previous two fiscal years and the current fiscal year. On the basis of such declaration,

the Managing Authority will then check that the new “de minimis” subsidy will not raise the total amount of de

minimis aid received by the Final Beneficiary acting as an undertaking during the period covering the fiscal

year concerned, as well as the previous two fiscal years, to a level above 200.000,00 EUR.

Thus, during the project implementation, Final Beneficiaries assignee of the Programme Contribution under

the de minimis regime, for every submitted Progress Report, have to declare34 the funding received under

the de minimis regime over the three-year financial period until the related Progress Report.

The MA shall inform the National Authority/Coordinator that hosts the Final Beneficiary acting under the de

minimis regime of such issuing in order to allow the State to keep updated its aid register (the national or

own central register of de minimis aid) and to monitor ceiling of the relevant beneficiaries.

The verification activity concerns a set of check initiatives, both in the financing granting stage by the

Managing Authority of the Programme35, and in the expenditure check stage by the National First Level

Controller. In both cases, the check activity aims to verify that the Final Beneficiary, assignee of the public

contribution under the “de minimis” regime, complies with what laid down in the Programme/Calls provisions

concerned.

Consequently, whereas the respect of the provisions concerning the de minimis regime is validated by the

Programme bodies prior to project approval as far as funding limitations to partners are concerned, during

the project implementation Final Beneficiaries will be subject to the checks by First Level Controllers (as

better specified in the “Guidance for First Level Controllers”).

35 During the quality assessment of the project the Joint Technical Secretariat checks if the activities of the Lead Partner and all Project Partners respect of the Programme provisions concerning State Aid and the “de minimis” regime.


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Even if self-declarations can represent the most straightforward option, where existing, other national or

regional sources of information, where existing, (e.g. de minimis databases or registers) will be taken into

consideration by the relevant FLCO.

If during the check following the public contribution granting, the relevant Authority (Audit Authority or the

relevant services of the European Commission) verifies an irregularity in the rules of the granting, in contrast

with applicable regulation on the State aid or an irregularity in the aid granting, it will be possible at

Programme level to make a financial correction in compliance with the specific Community Regulation, in

force at the time of the aid granting.

The part of “illegal aid” shall be subject to the recovery procedure, under Articles 27-34 of EC Regulation

(EC) 1828/2006 as required by Article 138 (2) of EC Regulation 718/2007.

4.5. Equal opportunities

The implementation of projects approved under the IPA Adriatic CBC Programme should be in line with the

provisions concerning equal opportunities for men and women as well as combating discrimination based on

sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.

Whereas the promotion of equal opportunities will be regarded, among other horizontal policies, as a positive

factor in the selection of projects for funding, the control of the respect of the provisions concerning equal

opportunities is a task of the First Level Controllers.

For control purposes, self-declarations from the partners should be in principle sufficient in order to

guarantee the respect of the principle of equal opportunities. These declarations36 should include the

following minimum confirmations:

o that staff recruitment processes carried out in the project adhere to the principles of equal

opportunities;

o that equality is promoted in the project’s committees and boards;

o that the events organised by the project do not represent any barrier to participation (e.g., location

favouring accessibility);

o that there are no other barriers to participation;

o that all national rules on the issue of equal opportunities have been respected.

Nevertheless, in the case of specific actions (e.g. trainings) foreseen in the project, the principles of equal

opportunities should be particularly ensured. In this respect, further checks should be performed by the First

Level Controllers by examining - for example - the list of participants.

4.6. Protection of the environment

Projects should also be coherent with the objectives of protection and improvement of the environment

foreseen in Article 11 of the Treaty for the EU Functioning.

Whereas in the Application Form applicants are asked to describe the coherence of the planned project

activities with the environmental objectives at EU, in the implementation stage, for activities that may have

negative impacts on the environment (as investment), First Level Controllers have to verify that:

o evidence is provided by the Lead Beneficiary/Final Beneficiary that specific compulsory requirements

by Community or national legislation are fulfilled (e.g. feasibility study, environmental impact

assessment, building permission, etc. are available),

36 The declaration is included in the Activity Report.


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o self-declaration of the related Final Beneficiary is available stating the respect of all community and

national laws in terms of environmental impact.

4.7. Other applicable rules

4.7.1. Conflict of interest

Final Beneficiaries must undertake all necessary precautions to avoid conflict of interest and must inform the

Joint Technical Secretariat/Managing Authority without delay about any situation constituting or likely to lead

to any such conflict.

A conflict of interest exists where the impartial and objective exercise of the functions of any person involved

in the project is compromised for reasons involving family, emotional life, political or national affinity,

economic interest or any other shared interest with another person.

4.7.2. Double funding

One important element to be taken into account when participating in EU funded projects is the need for

implementing measures to avoid double funding from different co-financing sources for the same

expenditure item. In practice, this means that the expenditure that has already been supported by other EU

funds is not eligible. In case of co-financing from other EU funds, the cost can be deemed eligible only for the

part of the cost not covered by subsidy. Whereas analytical accounting systems help in this respect, more

straightforward measures must also be foreseen.

Irrespective of the control procedures in place in the different Participating Countries, the practice of

annulling original invoices and other probative documents by stamping them is compulsory in the framework

of the IPA Adriatic CBC programme. The used stamp must make explicit reference to the fact that the

expenditure has been co-funded by the Programme. In addition, the amount claimed as (or declared as)

eligible for every expenditure item must be clearly indicated37.

4.7.3. Treatment of revenues

As a general rule, the grant may not have the purpose or effect of producing a profit for Final Beneficiaries

and consequently it must be restricted to the amount required to balance income and expenditure for the

project. This being said, any revenue generated by the project must be deducted from the amount of total

eligible expenditure for the project concerned. This deduction will be made in full or pro-rata depending on

whether it was generated entirely or partly by the co-financed project.

Revenues can be defined as earnings generated during the project implementation through the sales of

products and merchandise, participation fees, rentals, services, or any other provisions of services against

payment or other equivalent receipts with the exception of:

‐ receipts generated throughout the economic lifetime of the co-financed investments in the case of

investment in firms;

‐ receipts generated within the framework of a financial engineering measure, including venture capital

and loan funds, guarantee funds, leasing;

‐ where applicable, contributions from the private sector to the co-financing of projects.

Each time a project has, or would have, the possibility to generate revenue, the Final Beneficiary shall

declare it in the Activity Report in order to let the Lead Beneficiary, the MA/JTS and the national FLCO know

the generated revenues.

37 Please refer also to § 6.1.1.3 of the PMCM.


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Should the project be identified as revenue-generating, the MA is entitled to deduct from the last Application

for Reimbursement the estimated net revenue that may be generated by the project.

The key decision is to consider if revenues can be (or not) calculated in advance:

o if revenues can be calculated in advance, the net revenue (the revenue minus the operating costs

generated all throughout project lifetime38) has to be calculated and deducted from total costs;

o if it is not possible to calculate the revenue in advance, all revenue generated within five years from

project completion has to be deducted.

The Programme contribution will be calculated on the basis of the total eligible expenditures having deducted

any revenue to be generated during the project implementation period, therefore contracts with Lead

Beneficiaries will be concluded without taking revenues into account.

No later than the closure of the Programme, all revenues not taken into account will have to be refunded to

Programme budget, in their entirety or pro-rata, depending on whether they were generated entirely or only

in part by the project.

The rules on revenue generating projects shall not apply to Final Beneficiaries subject to the rules on State

aid within the meaning of Article 107 of the Treaty (de minimis, Block Exemptions…). The reason for this is

that the rules on state aid for setting the public contribution for the financing of a project or a group of

projects (aid amount) has a different and specific purpose from those related to avoid the generation of

revenues in EU financed projects. It would, therefore, appear inequitable to require a project to comply with

the additional administrative burden here imposed.

The national FLCO will then verify at least:

a) in case the Final Beneficiary reports revenues (foreseen in the approved application Form and/or

possible to estimate the amount of revenues) that:

o the expenditure reported as revenues are only cash flows directly paid by users for the goods

and/or services provided by the project;

o evidence exists in the accounting documents of the project partner on the revenues generated by

the project;

o calculation method is provided by the Final Beneficiary to report the net revenues (the amount to

be deducted from the total eligible expenditure reported);

b) in case the Final Beneficiary does not report revenues (not foreseen in the approved application

Form and not generated by the project) that:

o statement of the Final Beneficiary is available and includes that the project does not generate

revenues;

o the accounting documents of the Final Beneficiary do not contain any revenues generated by the

project;

c) in case the Final Beneficiary does not report revenues (revenues generated are not declared)

but evidence exists in the accountings documents of the Final Beneficiary on the revenues

generated by the project. In addition the suspected irregularity has to be reported by the First Level

Controller to the responsible body at national level and revenues not reported will be reclaimed by

the MA according to the recovery procedure of the IPA Adriatic CBC Programme.

38 The operating costs to take into consideration in order to calculate the funding gap shall include management fees (for example staff, raw materials, energy costs), the maintenance expenditures and the material replacement costs. The financing costs (for example payment of interests) and the depreciation are to be excluded (this last one is not to be considered as cash flow).


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4.7.4. Interest and equivalent benefits from pre-financing

Any interest or equivalent benefits accruing from pre-financing paid by the Programme to the Final

Beneficiary must be declared to the MA by the concerned Final Beneficiary.

In this event, the Final Beneficiaries shall identify the amounts of pre-financing payment received in the bank

account indicated and the related interests accrued. In case this is not possible, the accounting methods

adopted by the Final Beneficiaries must enable to check the pre-financing payment disbursed and the

interests or other gains produced.

The interests accrued must be then declared at the time of the closure of the Project, thus with the last

Progress Report.

4.7.5. De-commitment of IPA co-financing (n+3 rule)

The European Commission demands from the Programme that each annual IPA co-financing is spent within

the three years following the budgetary commitment. This means that IPA co-financing not claimed in time by

the Certifying Authority to the European Commission is automatically de-committed from the Programme

budget and therefore lost.

The above described principle is the so-called “n+3 rule”, where “n” represents the year in which the co-

financing was committed and “+3” refers to the time (in years) during which the co-financing has to be spent.

For projects co-financed by the IPA Adriatic CBC Programme, the automatic de-commitment has

fundamental implications. The payment claims to the European Commission are based on the reported and

certified expenditures submitted by the projects, thus very much depends on projects’ financial performance.

In case the European Commission de-commits IPA co-financing and if the de-commitment cannot be

covered otherwise, the IPA co-financing of ongoing projects subject to delays in reporting, on the basis of the

spending forecasts planned in the approved Application Form, must be reduced.

With the aim to avoid any risk of an automatic de-commitment of the Programme’s financial contributions and

without prejudging the termination of the IPA Subsidy Contract, if the Final Beneficiaries are unable to

proceed with the expenditures envisaged or the expenditure flow goes below as forecasted in the Project

Application Form, the JMC may reduce the Community contribution granted to the Project in the amount that

has been validated and certified at a given date or to the different amount that really appears to be reported

within the expiration of the Project’s implementation period.

The IPA Subsidy Contract obliges financed projects to follow a pre-defined spending schedule which has

been set out in the Project Application Form. It further stipulates that the Programme bodies of the IPA

Adriatic CBC Programme have the right to deduct project funds that are not spent in time.

After official information is provided from the Commission about the amount to be de-committed from

Programme funds of year n or after official request from the Joint Monitoring Committee to reduce the IPA

co-financing for significantly delayed projects, the MA/JTS calculates the amount to be de-committed from

project funds and assesses the cases for which this de-commitment procedure may be suspended.

4.8. Detection of unduly paid out expenditure, including irregularities

Both during project implementation as well as after project closure it cannot be excluded that, as a result of

an on-the-spot check (both for first level and other control purposes) or due to the availability of information

not previously existing, First Level Controllers or auditors consider that some of the expenditure previously

certified, included in closed Progress Reports (DVE) and subsequently paid out by the Certifying Authority

might be declared finally as non-eligible according to national or Community rules or according to the IPA

Adriatic CBC Programme requirements.


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In case irregularities have been detected by First Level Controls or other controls bodies, the project will be

subject to corrective measures. Should the First Level Controllers find costs in the project partner’s

expenditure that cannot be considered eligible, they will be not validated. As a consequence that

expenditure considered as not eligible could not be reimbursed at all to the concerned Final Beneficiary.

The wording "irregularity" means any infringement of a provision of applicable rules and contracts resulting

from an act or omission by Final Beneficiary which has, or would have, the effect of prejudicing the general

budget of the European Union by charging an unjustified item of expenditure to the general budget.

Therefore, the concept of irregularity covers a wider range of issues rather than just strictly financial matters.

Irregularity can mean e.g. non-compliance with the archiving rules, publicity rules, inadequate documentation

or failure to provide adequate and correct information in the Progress Reports. Detected irregularities will

imply follow-up actions by Programme and national authorities, e.g. withdrawal or reduction of the subsidy or

recovery of the granted funds.

This correction can be also the result of the on-going checks of the Managing Authority39. Likewise, audits of

the European Commission or the Court of Auditors may trigger this process.

In cases of expenditure unduly paid out to Final Beneficiaries, these funds must be recovered by the

Programme bodies according to one of the following two options:

1. for projects still running, the amounts must be deducted from the next Application for

Reimbursement due;

2. for already closed projects, a recovery procedure towards the Lead Beneficiary must be launched.

Both options are presented in the following paragraphs.

4.8.1. Recovery of funds from running projects

As stated above, where recoveries shall be performed in running projects, all unduly paid out funds must be

deducted from the next Application for Reimbursement due or, where applicable, from Application for

Reimbursement which are still under examination by the Programme bodies. In order to ensure a proper

audit trail of such deductions, these financial corrections will be managed and stored through the

Management and Information System.

Depending on how the amounts unduly paid out have been detected, different requirements must be met:

a. in cases where they have been identified by the First Level Controller of the Final Beneficiary

(e.g. during on-the-spot checks), the relevant controller must provide the necessary information to

the MA/JTS (and National Authority where foreseen by national procedure40) so that the financial

correction can be made. Being a judgement on its own previous work, withdrawal proceedings

initiated by a First Level Controller cannot be argued by the concerned Final Beneficiary;

b. in cases where they have been identified by other level controllers (MA, Certifying Authority, Audit

Authority, European Commission...), the Managing Authority will promptly inform the Lead

Beneficiary and the concerned Final Beneficiary. A contradictory procedure, eventually involving the

FLC responsible body at national level, will be undertaken whenever necessary.

4.8.2. Recovery of funds from closed projects

For cases in which the project has already received the last IPA fund instalment, the Managing Authority

shall demand from the Lead Beneficiary repayment of subsidy in whole or in part. In case the amounts

unduly paid out refer to a Final Beneficiary, it will be up to the concerned Final Beneficiary to repay the Lead

Beneficiary any amounts unduly paid in accordance with the agreement existing between them (Partnership

39 See in § 6.2.1.2 of the PMCM. 40 E.g. Serbia.


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Agreement). If the Lead Beneficiary does not succeed in securing repayment from a Final Beneficiary after

the LB has enforced all means foreseen in the Partnership Agreement, the participating Country on whose

territory the relevant Final Beneficiary is located shall reimburse the Managing Authority the amount unduly

paid to that Final Beneficiary.

According to Art. 18 of the General Conditions of the IPA Subsidy Contract (Recovery procedure) the Lead

Beneficiary has four months to proceed with the reimbursement of the requested amount. Likewise, should

the process refer to one of the Final Beneficiary, this period applies to the repayment by the concerned Final

Beneficiary according to Art. 11 of the Partnership Agreement (Recovery of the unduly paid amounts).

In compliance with Art. 138 (1) of Reg. (EC) 718/2007, interests will be calculated in accordance with Article

102(2) of Regulation (EC) 1083/2006.


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5. PROJECT EXPENDITURE AND APPLICABLE RULES

5.1. General eligibility principles

Eligible costs are those necessary for carrying out the project activities, paid out directly by Final

Beneficiaries and made in compliance with the specific eligibility criteria.

They may be:

‐ exclusively devoted to the project objectives and activities, or

‐ be allocated proportionally to the project, applying a justifiable fair and equitable method of

calculation.

Based on these general principles, in order to be eligible the expenditures have to be:

o actually paid (principle of real cost) by the respective Final Beneficiary;

o incurred within the period of eligibility of the project;

o reasonable, justified, and in compliance with the requirements of a sound financial management, in

particular with economy, efficiency and effectiveness principles;

o included in the estimated total budget and closely linked to any action or output of the approved work

plan and necessary for its implementation;

o identifiable and verifiable, in particular must be recorded in the accounting records of the Beneficiary

and determined according to the applicable accounting standards of the Country where the

Beneficiary is established and according to the usual cost-accounting practices of the Beneficiary;

o in compliance with all the relevant EU, national and Programme rules;

o in compliance with the requirements of applicable tax and social legislation;

o accompanied by the necessary documents proving that the expenditure is real and that the action

has been implemented and/or the output has been delivered;

o not shared with any other project partner.

Spending that breaches one of these rules will be considered ineligible and will not be paid by the

Programme.

Definition of the general principles

The “real cost” principle means that costs declared must have been actually borne by the Beneficiary,

i.e. there must be evidence of actual payment of the amounts claimed through receipted invoices or

equivalent accounting documents. However, some costs may be claimed although their precise amount

can only be estimated, namely depreciation and overheads (indirect costs). The estimated amounts

claimed must nevertheless be justified by accounting documents having a probative value equivalent to

invoices.

The principle of economy requires that the resources used by the institution for the pursuit of its

activities should be made available in due time, in appropriate quantity and quality and at the best

price.

The principle of efficiency is concerned with the best relation between resources employed and

results achieved.

The principle of effectiveness is concerned with attaining the specific objectives set and achieving

the intended results.


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In addition, costs must also respect the following specific requirements in order to be eligible:

o they belong to one of the Programme categories of expenditure (budget lines), work packages and

have been incurred according to the rules established by the Programme and specified, where

existing, by Guidance for First Level Controller;

o they have been incurred in compliance with the rules on the Programme eligible area and the

location of activities;

o they are denominated in Euro;

o they are not financed by any other Community fund.

5.1.1. Overview of eligible and not eligible costs

Eligible expenditure are those complying with all the relevant EU, national and Programme rules.

Expenditure that breaches one of these rules will be found ineligible and will not be paid by the Programme.

This being said, articles 34 and 89 of the IPA Implementing Regulation establish the main rules on eligibility

of expenditure. Further rules on eligibility of expenditure have been laid down by the Programme.

The table below shows the eligible, the not eligible and the eligible costs under certain conditions according

to articles 34 and 89:

Eligible costs Not eligible costs

Value added taxes if:

- they are not recoverable by any means;

- it is established that they are borne by the Final Beneficiary; and

- they are clearly identified in the project proposal.

Taxes, including Value Added Taxes (if the requirements for eligibility are not respected)

Charges for transnational financial transactions. Customs and import duties, or any other charges

The bank charges for opening and administering the accounts, where the implementation of an operation requires a separate account or accounts to be opened.

Bank charges, costs of guarantees and similar charges.

Conversion costs, charges and exchange losses associated with any of the component specific euro accounts, as well as other purely financial expenses.

Legal consultancy fees, notarial fees, costs of technical or financial experts, and accountancy or audit costs, if they are directly linked to the co-financed operation and are necessary for its preparation or implementation.

Fines, financial penalties and expenses of litigation.

The cost of guarantees provided by a bank or other financial institutions, to the extent that the guarantees are required by national or Community legislation.

The purchase of land for an amount up to 10% of the eligible expenditure of the operation concerned

Purchase, rent or leasing of land and existing buildings.


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Overheads, provided that they are based on real costs attributable to the implementation of the operation concerned. Flat-rates based on average costs may not exceed 25 % of those direct costs of an operation that can affect the level of overheads. The calculation shall be properly documented and periodically reviewed.

Operating costs, including rental costs, exclusively related to the period of co-financing of the operation, may be considered eligible on a case-by-case basis.

Second hand equipment.

Contribution in kind.

Interest on debt.

Moreover, according to Art. 89.4 costs incurred by public authorities for the implementation of projects

(e.g.: staff costs and costs related to the services relating to the preparation and implementation of a project)

shall be eligible only if these costs do not arise from their statutory responsibilities or day-to-day

management, monitoring and control tasks and if these costs are not double-invoiced at the expense of

public budgets.

In addition to the above mentioned general rules, Final Beneficiaries financially contributing to the project

and receiving funds from the IPA Adriatic CBC Programme are not allowed to contract each other or to

contract Associates to carry out project activities: thus the related expenditure will not be considered as

eligible.

The following paragraphs of this chapter will provide other criteria and requirements for eligibility of

expenditure.

5.1.2. Specific provisions for expenditure incurred outside the Programme eligible area

As general principle, projects co-financed by the IPA Adriatic Cross-border Cooperation Programme must be

realized in Programme eligible areas, even though at project level, in exceptional cases, expenditure may be

incurred also outside the Programme eligible territories.

As a general rule, the expenditures are considered incurred in the place where the Final Beneficiary is

located (where it has the registered office or the branch office).

The following table syntheses the criteria in order to establish the location of expenditure according to each

budget line:

Staff Location of the registered office or of the fixed establishment (branch office) involved in the project.

Travel and accommodation Location of the event/meeting

Overheads Location of the registered office or of the fixed establishment (branch office) involved in the project

External expertise Location of the registered office or of the fixed establishment (branch office) involved in the project


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Promotion Location of the registered office or of the fixed establishment (branch office) involved in the project

Meetings and Events Location of the event/meeting

Equipment Place of location of the equipment

Investments Place of location of the investment

Financial guarantee and bank charges

Location of the registered office or of the fixed establishment (branch office) involved in the project

At project level, in exceptional cases, expenditure incurred outside the Programme area may be eligible

provided that both following conditions are respected:

1. the project could only achieve its objectives with that expenditures (Art. 97.1 second sub-paragraph

of IPA Implementing Regulation) and

2. the expenditures have been authorized in compliance with Art. 97.2 of IPA Implementing Regulation.

This means that costs incurred outside the Programme eligible area are ineligible, except if it is proven

that the activities covered by these expenditures are absolutely necessary to achieve the objectives of the

project, they contribute to reach the project’s objectives and have a clear and direct positive impact on the

Programme area.

In case this expenditure has not been foreseen in the Application Form, Final Beneficiaries, shall require a

formal authorization to the Managing Authority through their Lead Beneficiary, stating clearly the motivation

of such activity, the need to implement it outside the Programme eligible area and the benefit for the project

and the Programme. Such request should be submitted before incurring expenditure outside the Programme

eligible area, otherwise Final Beneficiaries may risk to bear the whole costs if the authorization is not

granted.

The Managing Authority/JTS will then verify the submitted request and decide whether to authorize it or not.

In case of authorization, the competent FLCO will be informed accordingly.

In case this request brings to a substantial modification of the project, the authorization shall be provided by

the Joint Monitoring Committee41.

Additionally to what said above, the relative Call for proposals may establish specific rules for territorial

eligibility42.

5.2. Period of eligibility of expenditures

As a general rule, at Programme level expenditure shall be eligible if it has been actually paid between 1

January 2007 and 31 December of the third year following the last budgetary commitment of the

Programme, for projects or part of projects implemented within Member States, and incurred after the

signature of the financing agreement for projects or part of operations implemented within IPA Countries.

This means that the starting date of eligibility of expenditures is different for Member States and for IPA

Countries Beneficiaries:

41 See § 3.4 of the PMCM. 42 As far as concerns projects financed under the first Calls for Ordinary Projects proposals, in well justified cases, project activities (i.e. organization of meetings, etc.) can be implemented in the cities where the EU institutions are located (i.e. Brussels, Strasbourg, Luxemburg); the relative expenditures are eligible only if they are incurred by eligible Beneficiaries and for activities carried out in the institutional offices of the States, Regions and other relevant Public Authority involved in the project.


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o for Greek, Italian and Slovenian Beneficiaries, expenditure must be incurred on or after the 1st January 2007;

o for IPA Countries Beneficiaries, expenditure must be incurred on or after the signature of the financing Agreement with the European Commission approving the Community contribution, namely:

‐ Albania: 18 June 2009;

‐ Bosnia and Herzegovina: 20 February 2009;

‐ Croatia: 1 December 2008;

‐ Montenegro: 22 June 2009;

‐ Serbia: 16 April 2009.

The deadline for spending the final funds will instead be 31 December 2016 (the N+3 deadline for the final

funds committed on 31 December 2013). For Serbian Beneficiaries, whose last budgetary commitment for

the Programme will be for 2012 due to the phasing out condition of Serbia, the related expenditures are

eligible at the latest until 31 December 2015.

Time-wise eligible expenditures can be distinguished between preparation costs and implementation costs.

Project preparation costs

In the framework of the Programme, preparation costs do not constitute a specific budget line, but a work

package in itself (WP0). On this basis, they consist in the same addition of costs for different budget lines

with the only exceptions of overheads, promotion, investments, equipments and financial charges costs

which are not eligible in the preparation phase.

As a result, all requirements specified for the budget categories are applicable also to the eligibility of

preparation costs. In addition to these, the following requirements apply as well:

o preparation costs are only eligible if foreseen in the approved Application Form, thus only partners

having stated preparation costs in WP0 of the approved Application Form can claim this type of

costs;

o these costs must relate exclusively to preparation activities (such as the finalization of the application

documents, the organization of joint meetings, the development of preparatory studies, analysis and

researches for activities preliminary to the project) carried out between the starting date of eligibility

defined for each participating Country (as above explained) and the date on which the Application

Form has been submitted;

o the payment of preparation costs must be foreseen in the first spending forecast period and reported

in the first Progress Report; in practice this means that they could be paid also after the submission

of the Application Form, on the understanding that the related expenditure must be reported within

the first Progress Report, otherwise they will not be reimbursed by the Programme;

o the eligible preparation costs respect the ceilings established by the reference Call for Proposals43;

o in case any Beneficiary falls into the de minimis regime, the preparation costs are not eligible.

Please note that costs related to the negotiation of requests put forward by the Managing Authority or by the

Joint Monitoring Committee and that must be fulfilled prior to contracting are in all cases to be considered as implementation and not preparation costs.

43 For ordinary projects approved under the 1st Calls, preparation costs must not exceed 2% of the total project budget.


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Project implementation costs

The implementation period is the period that goes from the starting date of the project to its closing date, in

accordance with the approved Application Form and its following amendments. Consequently as a general

rule, implementation costs are eligible if related to activities implemented within this implementation period.

The rules concerning the starting date of projects are established by the relative Call for Proposal. At the

earliest, costs are eligible from the day indicated in the related Call for proposals, provided that this day is

the official start of the project. In this case, Beneficiaries may decide at their own risk to start the

implementation activities before the project is finally selected for granting. Anyway, for Beneficiaries falling

into the de minimis regime, the implementation costs shall be eligible at the earliest from the closing date

of the Call for proposals.

The ending date of the project indicates when all the project activities have to be concluded. Final

Beneficiaries are allowed to pay the costs related to such project activities also after this ending date, but no

later than one month after it and provided that they are anyway paid within the 31st December 2016 (or 31st

December 2015 for Serbian Final Beneficiaries). This means that within one month after the ending date

stated in the Application Form Final Beneficiaries must conclude all payments, otherwise the related

expenditures will not be eligible.

5.3. Eligibility of expenditure by budget line

The different budget lines in which the total budget of approved projects must be broken down are:

‐ Staff costs;

‐ Overheads

‐ Travel and Accommodation

‐ External Expertise

‐ Meetings and Events

‐ Promotion costs

‐ Equipment

‐ Investments

‐ Financial charges and guarantee costs.

In this chapter, explanations on how to report the foreseen costs are given. In addition, an indicative list of

the relevant supporting documents for each category of expenditure that need to be made available for the

controllers is also provided. Also, Guidance for First Level Controller shall be consulted on details of how and

where supporting documents should be provided.

5.3.1. Staff costs

This budget line refers to the expenses incurred for personnel44 employed by the organization of the Final

Beneficiary acting as an employer, and are directly related to project activities. These costs comprise actual

salaries plus social security, health insurance and other statutory costs included in the remuneration (all

calculated in accordance with the national legislation).

44 Employee or employed under national labour law.


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Specific eligibility requirements

In addition to the general eligibility requirements, together with the existence of the necessary proof of

expenditure and proof of payment, eligibility of staff costs is subject to the following:

‐ The remuneration of personnel is eligible only if related to the project activities and not to their usual

day-to-day management tasks and statutory responsibilities. Double funding shall be avoided.

o Expenditure for labour of civil servants working on a project, who are employed at organisations

which are financed from the national, regional or municipal budget, is eligible to the extent that

they relate to the cost of activities which the relevant public authority would not carry out if the

concerned project was not implemented;

o These costs must be calculated on the basis of the actual gross salary rate (the employee’s

salary plus all legal provisions (insurances, health and social security charges etc.) unless paid

by another source) stated in the regular employment contracts used in the respective Beneficiary

institution, meaning that no unjustified ad-hoc salary increases for project purposes are

possible.

‐ Additional charges besides the charges obligatory according to national rules are not eligible. This

also means that social charges must relate only to contributions paid for the employer and must be

limited to those which are compulsory according to the national labour contract/national law.

Voluntary contributions (e.g. institutional pension schemes) shall be excluded from the calculation.

‐ Where foreseen by contract, over-time hours are eligible for full-time employees or for part-time

employees only if transparently and proportionally allocated to the project linked to project activities

and clearly declared in the monthly timesheets. In case of over-time hours, a declaration made by the

responsible person in the employer institution (the one that signs timesheets) should be submitted

stating that over hours were absolutely necessary.

‐ Performance bonuses or other additional payments to employees (fringe benefit, bonus payments,

subsistence allowance...) are only eligible if related to the project and foreseen in the signed contract,

national or internal regulations (ad-hoc regulations applicable only to the project are not allowed).

‐ If a person is part-time employed on the project, a calculation of the share of cost to be reimbursed

within the project has necessarily to be carried out by applying an equitable and fair method. The

calculation of the costs of staff costs not working full time in the project should be clearly provided to

the FLC and should be based on the following formula (unless differently disposed at national level):

Gross salary45 * project worked days/hours

workable monthly days/hours46

Example of calculation of hourly rate where not provided by national eligibility rules:

Employee’s monthly gross salary a

workable monthly days47 b

45 ‘Gross salary’ means the employee’s gross salary, including the possible salary for overtime, for sickness, absence and holidays and any other benefit, rewards, bonus payment plus all legal provisions (insurances, social security etc.) paid both by the employee and by employer. Gross salaries, employment taxes and social contributions must be calculated individually for each employee and could be based on the monthly payslips. 46 According to national contracts/laws.


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Daily rate c = a/b

Hourly rate (h) Daily rate (c)

Daily workable hours (w)47

Thus, this calculation is based on the hourly/daily rate (h or c) resulting from the actual personnel cost

(a) divided by the total number of hours/days (b) workable in the specific period of reference (generally

per month) by the employee of the partner institution. This hourly/daily rate (h or c) is then multiplied by

the number of hours/days (d) actually worked on project activities in the claimed period. See the

example in the following table.

Example of calculation for staff costs (ex. October 2011)

Salary actually paid according to the employee’s contract (a) 2.500,00 €

Total workable hours in the period of reporting (w) 156 hrs

Hourly rate (h) 16,03 €/hr

Total hours worked on the project in the relative period of reporting (d) 80 hrs

Total eligible cost in the reference reporting period (hours worked*hourly rate)(d*h) 1.282,40 €

Reporting staff costs

The following documents must be provided to the competent FLCO in order to prove the expenditure and the

related payment:

- List of personnel working on the project which specifies the name of each employee, qualification (i.e.

managerial staff, technical staff, administrative staff), function in the project, to what extent the work is

dedicated to the project (for examples the percentage of 100% or 20%...), gross salary and the

indicative costs to be funded on the project’s budget. The list can be submitted at the beginning of the

project within the first progress Report and, if necessary, can be updated during the project lifetime (i.e.

adding new employee, extension of one employee’s contract).

- Employment contract of every project employee which permits the identification of the employment

relation with the Beneficiary’s organisation; it must be provided only the first time costs for that

employee are claimed.

- In addition for each person working part-time on the projects, the service order showing the tasks to

perform and the indicative number of days/hours or other indication of planned involvement in the

project; it must be provided only the first time costs for that employee are claimed provided that the job

contracts/service orders are not modified.

- Monthly timesheet proving the actual time worked on the project: it has to be provided for every

project’s employee working full-time or part-time on a project; it must be properly filled in with a

description of the tasks carried out within the project and duly signed (and stamped), both by the


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employee and the responsible person in the employer institution. Timesheets for full-time employees

may not be provided if such possibility is foreseen according to national rules, but in this case a report

of the activities accomplished should be provided.

- Evidence of the calculation method of the hourly rates for people working part-time for project purposes.

- Payslips.

- Proofs of payment, both of salary and of all compulsory charges.

In the following table, some examples of proof of payment documents are given.

Examples of proof of payments for staff costs

o Payment orders;

o Receipted payment orders by the bank or signed by the Accounting Manager or by the

Administration Manager from which it clearly emerges the amount and the name of payee;

o Not transferable at-sight checks or bank checks from which it emerges clearly the amount and

the name of payee. These documents must be accompanied by a bank statement showing the

cashing of the check, or containing any bank transfers (including cumulative ones) evidencing

the payment of wages or salaries;

o Bank transfer signed by the cashiers with the stamp of the bank;

o Daily book for payment in cash of an amount up to the maximum amount envisaged by the

National, Regional and European rules about cash payments if applicable.

Receipted payment orders concerning salaries and wages paid by public bodies may also be presented

cumulatively, accompanied by a letter from the competent office, proving that the single document refers to

the staff allocated on the project.

If a person is full-time employed on the project, the total expenditure of work is eligible.

Other relevant information

Travel and accommodation costs for staff shall be reported under the "Travel and Accommodations” budget

line.

Travel and accommodation costs for Associate/s shall be reported under “External expertise” budget line

(see § 3.5 of this Manual).

In cases of in-house sub-contracting47, the costs of staff directly employed by the in-house provider must be

reported under the “External expertise” budget line in case the in-house provider issues an invoice, including

VAT.

5.3.2. Overheads

This budget line refers to all direct general costs (i.e. costs deriving exclusively from the project) and

indirect general costs (overheads related to the project’s activities, based on real costs and calculated on a

pro-rata basis according to a duly justified, fair and equitable method).

The overheads budget line may include cost items such as:

47 Refer to § 4.2.1 for further information on in-house sub-contracting.


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o office costs, i.e. electricity, heating, water, cleaning, office supplies, office rent;

o administrative costs, i.e. telephone, fax, internet, mailing, copying, stationery, and office supplies

related to project activities;

o all costs/charges for national financial transactions, provided that they are based on real costs

attributable to the implementation of the project, in case a specific bank account for the project has

not been opened;

o other administration expenditure absolutely necessary for the successful completion of the project.


In addition to the general eligibility requirements, together with the existence of the necessary proof of

expenditure and proof of payment, eligibility of overhead costs is subject to the following requirements

specific for direct or indirect costs.

A) Direct general costs:

Direct general costs directly allocated to the project are totally eligible within IPA Adriatic CBC Programme if

they fulfil the following criteria:

‐ they show a direct link with the project’s activities;

‐ they are calculated on the basis of actual costs and capable of verification, i.e. based on factual elements

in the Beneficiary’s general accounting system which can be verified by First Level Controller and/or

auditor;

‐ no lump sums, overall estimations or arbitrary keys are allowed.

B) Indirect general costs, allocated proportionally to project

When overheads could not be allocated directly to the project, they must be allocated proportionally provided

that they are based on real costs, which relate to the implementation of an IPA Adriatic CBC project, are

allocated pro rata to the project according to a duly justified fair and equitable method and their calculation

has to be done on flat rates based on average costs. The resulting flat rates may not exceed 25% of those

direct costs of an project that can affect the level of overheads.

This means that, where actual cost is shared with organisational non-project costs, then apportionment (flat

rate) is permissible providing that:

o the apportioned overheads are actual, auditable and directly attributable to the project;

o the source cost is eligible for the IPA Adriatic CBC Programme and fully auditable (by means of

receipts, bills etc);

o the indirect general costs attributable to the implementation of the project are allocated pro rata to

the project according to a duly justified fair and equitable method;

o the cost is clearly relevant and can be realistically apportioned to reach a figure that reflects the true

cost incurred by the Final Beneficiary in carrying out the project;

o the costs could be distributed according to the following methods depending on which can best

reflect the type of cost:

- the ratio of the number of people working for the project/number of people working in the

organisation or department;

- the ratio of the number of hours worked on the project/number of hours worked in total in the

organisation or department;


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- the ratio of the surface used by the personnel working for the project/surface of the

organisation or department.

o the calculation of overheads shall be properly documented and reviewed periodically, when

appropriate.

The method chosen will depend on the type of cost thus it is not possible to use the same method of

calculation for every costs. For example, the major costs such as heating bills, lighting etc, are calculated

against real bills and are apportioned by reference to actual room space used for the project, whilst

telephone bills require a methodology based on actual telephone use by project. Any other single method of

apportionment than the ones defined above is not acceptable, especially where such a single method

creates an averaging of central costs for every project (i.e. not relevant to each project specifically, or based

upon on the level of project salary cost).

The share of apportionment shall not exceed 25% of those direct costs of the project that can affect the level

of overheads. This means that, since any direct cost of a project actually incurred by project Beneficiaries

serves as the basis for calculation of indirect costs that can be proportionally allocated to a project, any

reduction in these direct costs (i.e. in relation to the estimated budget or following a financial correction) will

have an impact on the total flat-rate amount of indirect costs which can be validated by the First Level

Control Offices.

A basic example of how to structure the overheads costs and apportion them to a project are mentioned in

the following table.

Example of apportionment method based on space or area used

The final Beneficiary implements a project sharing an office with other no-project activities; it uses a space of

1.000 sq. metres out of a total of 4.000 sq. metres in the building.

The calculation of indirect overheads, for instance power, heating, can be apportioned on the basis of space

or area used.

The percentage of available space used by the project should be calculated by this formula:

project space/total space * 100 = % space used

1.000/4.000 *100 = 25%

General spaces (such as corridors, toilets, canteens, general admin space, etc.) shall not be included in the

total available space.

Accordingly, a project using this space all year would claim 25% of the heating, power etc. within the project

as incurred for project purpose.

Example of apportionment method based on space or area used for a period of time

Moreover, in case the project doesn’t run for a full year, but for instance for 40 weeks out of 50 weeks the

building is opened for a year, the method above should be combined with also the percentage of time this

space is used by the project.

time the space is used/time available *100 = % of time the space is used

40/50 * 100 = 80%

The project uses 25% of the space available for 80% of the time available. Therefore the final apportionment


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figure is calculated as follows:

% of space used * % of time the space is used = apportionment percentage

25% x 80% = 20% = 20%

Accordingly, the project would claim 20% of the relevant cost (the heating, power etc) for the period in

question.

The chosen apportionment method/s must be explained in a statement to be attached to the

Progress Report.

Finally, Beneficiary should verify that the indirect overheads cost charged on the project (independently of

the chosen apportionment methodology/ies) do not exceed 25% of those direct costs of a project that can

affect the level of overheads. In practice, taking into consideration that direct costs are those costs which

are directly related to project activities implemented by the single Final Beneficiary, where the link with these

project activities can be demonstrated, indirect overheads cost charged on the project shall not exceed 25%

of the total amount of the following project costs:

o Staff costs (with the exclusion of administrative staff expenditure, such as: management costs,

recruitment expenses, costs for the general accountant of the institution...);

o Travel and accommodation;

o External expertise;

o Meetings and events;

o Promotion costs;

o Equipment;

o Investments;

o Financial charges and guarantee costs.

Reporting overheads costs

On the basis of overheads that are directly or indirectly allocated, different documents must be provided to

the competent FLCO:

A) Direct costs:

- Proof of expenditure as receipted invoices or accounting documents of equivalent probative value or

other relevant documents (i.e., postal account bulletin, receipt, debit note showing the purchase)

clearly demonstrating project relevance;

- Proof of payment for all expenditure items.

B) Indirect costs:

- Calculation statement of the chosen apportionment method/s and a list of the costs items that have

been included in the calculation of the direct costs that can affect the level of overheads in order to

demonstrate that the flat rates do not exceed 25% of them. In the case of on-the-spot checks, the

relevant accounting documents supporting the calculation method should be made available for the

First Level Controllers at the partners’ premises.

- Proof of expenditure such as invoices or other accounting documents of equivalent probative value

or other relevant documents (i.e., invoice; postal account bulletin, receipt, debit note showing the

purchase) with clear demonstration of project relevance.


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- Proof of payment for all expenditure items.


Examples of proof of payments for overheads

o Payment orders;

o Receipted invoices showing the expenditure and or the payment;

o Receipted payment orders by the bank or signed by the Accounting Manager or Administration

Manager from which it clearly emerges the amount and the name of payee;

o Not transferable at-sight checks or bank checks from which it emerges clearly the amount and


cashing of the check;


o Bank statement showing the possible bank transfer to the supplier;


National, Regional and European rules about cash payments

5.3.3. Travel and Accommodation

This cost category refers to the travel and accommodation costs of project staff48 of the Beneficiary

institutions listed in the Application Form related to their participation in meetings, seminars, conferences and

other similar activities, related to the project.


Travel and accommodation costs for project staff (see ‘staff costs’ budget line), may be reported in

accordance with the provisions indicated in national rules or in any regulations/internal circulars of

Beneficiary institutions.

As general rules the following principles must be taken into consideration:

‐ Travel and accommodation expenses must correspond to affordability (inexpensiveness) criteria,

demonstrable on the basis of an assessment. This means that the most cost-efficient mean of

transportation shall be used (normally public means); no business or first-class tickets for air or train

transport are eligible irrespective of the fact that this may be allowed by the internal rules of the

institution; any exception to this principle must be duly justified, otherwise the related expenditure will not

be eligible; board and lodging costs can be reimbursed if they are in a reasonable price range.

‐ In case of transport by taxi or by hire car49, reimbursement may be permissible on the basis of the actual

cost, provided that this cost is not excessive in relation to expenditure for the use of alternative means of

transport.

‐ Only in exceptional cases project Beneficiary may use company cars or private cars for project’s travels.

In this case:

o the decision for taking the car must be clearly justified and documented (e.g. public transport is not

available, company car is the most economic option), and 48 This category refer also to the costs of directors or other representatives of the Final Beneficiary institution even though their names are not explicitly stated in the list of project team. 49 In case of car rental the maximum class allowed is class C or the equivalent.


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o only travel costs connected to the project trips are eligible and must be accounted according to

national or institutional rules (i.e. reimbursement per kilometre, highways tickets acquired during the

journey, specific declaration of the distance travelled...).

‐ Costs may be accepted without reservation if they fall in the range of average costs. Higher costs must

be duly justified in each case.

‐ The duration of the mission must be clearly in line with the purpose of it (e.g. from the day before to the

day after the concerned meeting). Costs for longer duration of the mission are eligible if it can be

demonstrated that the additional costs (e.g. extra hotel nights) do not exceed the savings eventually

made in the costs for transportation.

‐ Costs must be definitely borne by the partner institution, meaning that direct payment by the employee is

not sufficient as proof of payment.

‐ Proofs of travel and accommodation expenses must be submitted for validation of expenditure.

Consequently flat-rate expenditures are meant as inadmissible for accounting purposes. This means that

these costs must be reimbursed on the basis of an itemised list of the costs effectively incurred by the

employee. In case ‘daily allowances’ are foreseen in the national rules as the only way of reimbursement

of such costs, they are eligible for Programme reimbursement50.

Reporting of travel and accommodation costs

The following documents must be provided to the relevant FLCO in order to prove the expenditure and the

related payment:

- Documents (e.g. authorisation of the mission, decisions on the assignment) certifying the mission

carried out, from which it is clearly possible to infer the name of the travelling employee(s), date,

reason and destination of the mission;

- Proof of expenditure for costs paid by the partner institution (e.g. invoice of travel agent, plane tickets

with boarding cards);

- Reimbursement request from the employee, indicating the detailed expenditures incurred for travels

and transfers. All necessary documents proving the claimed real costs must be provided (e.g.

bus/train/metro tickets, meal receipts, plane ticket with boarding cards; car rental invoice...);

- In case of use of own car or company car, calculation sheet, prepared according to national or

institutional rules, stating at least the distance, the unit rate and the total costs of travel. All

necessary documents proving the claimed real costs must be provided (such as highways tickets

acquired in case during the journey or specific declaration of the distance travelled);

- Other supporting documents (e.g., invitation, agenda, list of participants, minutes);

- Proof of payment of costs directly paid by the institution or in case of cost directly paid by the

employee proof of reimbursement to the employee by the institution;


Examples of proof of payments for travel and accommodation costs

o Payment orders;


50 Per diem allowances are defined as fixed daily rates/flat rate for meals, accommodation, local travel which cannot be eligible tout court if not supported by an itemization list of the costs truly supported by the employee and documented by document of probative value (invoices, bills and so on) that the expenditure has been paid out.


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o Not transferable at sight checks or bank checks from which it emerges clearly the amount and








Movements that take place outside the area of cooperation of the project must be adequately justified

showing their necessity and relevance to the plan of activities of the project.

Movements outside the Programme eligible area must be instead previously authorized as explained in §

5.1.2.

In this budget line only costs of travel and accommodation borne by personnel assigned to the project

already engaged not specifically for project purposes but working on the project have to be reported, also in

case the cost for that personnel is not claimed.

5.3.4. External expertise

External expertise budget line includes costs paid out for professional services of an external expert,

consultant or other supplier, independently from the type of contract and exclusively engaged for project

purposes (thus the full contract amount must be reported in the project) to carry out certain tasks of the

project (e.g. studies and surveys, translation, coordination, financial management, legal consultancy fees

and notarial fees directly linked to the project and necessary for its implementation), which the Beneficiary’s

organization cannot perform with already engaged resources. The cost of these professional services are

eligible on the basis of contracts or written agreements defining the task to be accomplished and paid

against invoices or requests of reimbursement. The travel and accommodation costs incurred by experts

engaged specifically for project purposes shall be budgeted and reported under the external expertise

budget line.


Together with the existence of the necessary proof of expenditure and proof of payment, eligibility of costs

for external expertise is subject to the full respect of the relevant procurement rules51 and to the requirement

that the work of the external expert must be essential for the project.

In case of fee-based service contracts, the rates charged by the external expert must be reasonable, in

relation to the level of experience and expertise/competence and not higher than the average fee/wages

applicable to the related professional category or generally accepted on the market for similar services. In

addition, the days and hours of work of the external expert or of the Consultant’s personnel shall be fixed on

the basis of the laws, regulations and customs of the Country where the service must be provided and on the

basis of the requirements of the services.

51 Please refer to § 4.2 for further details on public procurement rules.


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In case the days and work of the external expert are not regulated by any means, they should be calculated

on the basis of the number of persons/number of days/daily rate applied, and with reference to a maximum

of 220 working days per year (or, if the total is lower, with reference to a maximum of 20 days per month).

Global price contracts can be stipulated too for project activities which should lead to a specific outcome

(studies and other result-oriented contracts), thus they should not be generally used for activities which focus

on the performance of tasks such as technical assistance.

Finally, the deliverables produced by the experts, especially as far as studies are concerned, must also

respect the necessary publicity requirements52 for promotional products.

Reporting external expertise costs


related payment:

- Documentation related to procurement and evidence of the selection process.

- Contract laying down the services to be provided, with clear reference to the project and the

Programme. For experts paid on the basis of a daily/hourly fee, such fee together with the number of

days/hours contracted and the total amount of the contract must be provided.

- Detailed invoice or debit note (request for reimbursement), clearly stating the date, the payee, the

payer, the title/acronym of the project and the name of the Programme53 and the description of the

services provided in line with the contents of the contract. For experts paid on the basis of a

daily/hourly fee, the invoice/debit note must include a clear quantification of the days/hours charged,

price per unit and total price.

- Proof of travel and accommodation expenses for professionals (experts) who are invoicing for these

costs, consequently flat-rate expenditures are meant as inadmissible for accounting purposes.

- Proof of payment of costs directly paid by the institution or in case of cost directly paid by the expert,

proof of reimbursement to the expert by the institution. In case the Final Beneficiary is obliged to pay

any compulsory charges (i.e. insurances, social security etc. for physical person experts),

documents evidencing the payment of these compulsory charges.


Examples of proof of payments for external expertise costs

o Payment orders;



Director;



cashing of the check or containing any bank transfers (including cumulative ones) evidencing

the payment of wages (or salaries if applicable);

52 Please refer to § 7 for further details on publicity rules. 53 The project title/acronym and name of the Programme on an invoice are important elements to link one expenditure to a specific project, funded within a specific Programme in order to avoid double funding in case of projects with the same name/acronym but financed by different Programmes.


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The activities, including movements, of external experts that take place outside the area of cooperation of

the project must be adequately justified as well as to be necessary and relevant for the implementation of the

project.

Movements outside the Programme eligible area must be instead previously authorized as explained in §

5.1.2.

Other costs for consultants/firms providing services necessary to implement project activities linked to

specific budget lines (e.g. reproduction or translation of project documents linked to specific events) shall be

budgeted under the related category of expenditure (e.g. "Meetings and Events”, “Promotion costs”,

“Investments”) as well as the related travel and accommodation costs.

5.3.5. Meetings and Events

In this category, costs related to the organisation of conferences, seminars, meetings, workshops (renting of

premises and equipment, catering, interpretation, printing, etc.) directly related to the project and traceable

from the approved Application Form, shall be reported.

It may also include the cost of external speakers and external participants in project meetings and events if

the cost will be definitively paid and borne by partners officially listed in the Application Form.


Together with the existence of the necessary proof of expenditure and proof of payment, eligibility of costs

for meetings and events is subject to the full respect of procurement rules54 and of publicity rules55.

For each event it must be clearly demonstrated the purpose and must be declared the location, the duration

and the number of participants.

Reporting meetings and events costs


related payment:

- Documents evidencing that the most cost-efficient option has been selected and, where applicable,

proof that public procurement rules have been respected.

- Contract laying down the service/s to be provided, with clear reference to the project, the

Programme and the specific meeting/event.

- Detailed invoice/receipt, clearly stating the date, the payee, the payer, the title/acronym and the

name of Programme, description of the services provided in line with the contents of the contract,

quantification of the services, price per unit (if applicable) and total price.

- In case the travel and accommodation costs are not foreseen in the contract of the professional

(expert) incurring them, they have to be reported using the documentation proving the actual

realization of the travel (tickets, boarding passes, etc).

54 Please refer to § 4.2 of PMCM for further details on public procurement rules. 55 Please refer to § 7 of PMCM for further details.


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- Deliverables (agenda, list of participants, minutes; copy of the materials produced directly linked to

the events and any other material testifying the carrying out of the event); in case of translation the

number of languages for which the service of translation is provided must be declared.

- Proof of payment.

In the following table, some examples of proof of payment documents are provided.

Examples of proof of payments for meetings and events costs

o Payment orders;

o Receipted invoice showing the expenditure and or the payment;











Complementary activities (i.e. visits) linked to internal or external events must have clear project relevance,

otherwise, costs linked to them are not eligible.

5.3.6. Promotion costs

Promotion costs budget line include all costs related to information and communication activities. Thus,

under this budget line the costs resulting from press releases, inserts in newspapers, leaflets, TV shows,

brochures, newsletters, website for the project and other publication costs not linked to specific events or

seminars shall be reported (e.g. display panels, commemorative plaques, banners, promotional items,

photographs and audio-video production, translations of promotional project documents).


Together with the existence of the necessary proof of expenditure and proof of payment, eligibility of

promotion costs is subject to the full respect of procurement rules56 and of publicity rules57.

Reporting promotion costs


related payment:

- Documents evidencing that the most cost-efficient option has been selected and, where applicable,

proof that public procurement rules have been respected.

56 Please refer to § 4.2 for further details on public procurement rules. 57 Please refer to § 7 for further details on publicity rules.


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- Contract laying down the service/s to be provided, with clear reference to the project and the

Programme.

- Detailed invoice/receipt, clearly stating the date, the payee, the payer, the title/acronym of the project

and the name of Programme, description of the services provided in line with the contents of the

contract, quantification of the services, price per unit (if applicable) and total price.




- The produced deliverables (brochures, newsletters, leaflets, gadgets...);

- Proof of payment.


Examples of proof of payments for promotion costs

o Payment orders;











5.3.7. Equipment

This budget line refers to the purchase/rent/leasing of equipments necessary for the successful

implementation of the project such as IT equipment (computer, printer, software and so on), office furniture,

certain machineries for specific project’s purposes.


Together with the existence of the necessary proof of expenditure and proof of payment, it has to be ensured

that the equipment:

o has not already been financed by other subsidies (e.g. EU, national or regional) and

o has not already been totally depreciated and

o is not claimed in another category such as the overheads budget line.

All costs in this category have to respect public procurement rules58. The most economic type of equipment

should be chosen and the equipment features/functions should be in line with the actual context of use.

58 Please refer to § 4.2 for further details on public procurement rules.


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They must also comply with the publicity rules59 in order to be considered as eligible.

The existence of the project equipment/s may be subject to FLCO verifications through on-the-spot checks.

Finally, depending on the specific option chosen to acquire the equipment (purchase, rent or leasing) specific

eligibility requirements must be also respected.

A) Purchase of equipment

In case of equipment used exclusively for project’s purpose, two options can apply:

A. 100 % full cost can be charged on the project;

B. depreciation method.

A) The purchase price is fully (100%) eligible provided that:

o the equipment is of low-value and thus it is not depreciable, or

o the period going from the date of purchase until the end date of the project is longer than or equal to

the normal depreciation period for each type of equipment; or

o the period from the purchase till the date of project closure is shorter than the normal depreciation

period, but:

- the equipment is used by the project partners and project target groups for the same

purpose for at least five years after the completion of project activities; or

- the equipment is part of a specific goal of the project (for example office furniture if the goal

of the project is to set up a bureau which will provide services for the target group not only

during the project implementation period).

In both these cases, a declaration stating that the equipment is used by the project partners

and project target groups for the same purpose for at least five years after the completion of

project activities or that the equipment is part of the specific goal of the project should be

provided. This declaration should be provided at any time during project implementation,

taking into consideration that if it is submitted with the first available Progress Report, the full

price can be reported in this Progress Report. Otherwise, until the submission of this

declaration, only the depreciation amount must be reported and, once submitted the

declaration, the remaining cost not depreciated yet, shall be reported in the first available

Progress report.

In all these cases, within five years from project end, Beneficiaries shall avoid any substantial

modification:

i. affecting equipment’s nature or its implementation conditions or giving to a firm or a public body

an undue advantage; and

ii. resulting either from a change in the nature of ownership.

B) The depreciation method instead applies in all those cases in which the full purchase price is not

eligible. In this case, the depreciation rate has to be determined according to the applicable accounting rule

(applicable tax legislation) of the Country where the concerned Final Beneficiary is established and the

depreciation allowances of the equipment are charged proportionally in each relevant Progress Report till the

end of the project.

The depreciation costs can never exceed the purchase price of the equipment.

59 Please refer to § 7 for further details on publicity rules.


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Example of calculation of eligible costs of computer in case of depreciation

Purchase cost (a) 1.000,00 €

Depreciation period (to be checked by national FLC) (b) 60 months

Monthly depreciation cost (c=a/b) 16,67 €

Number of the months reported in the Progress Report (d) 3

Total eligible cost (months used in the period of reporting x monthly

depreciation cost)(d*c) 49,99 €

Equipment NOT used exclusively for project’s purposes (for instance when the equipment is used by

staff working part-time for the project), should be charged on a pro-rata basis, also as far as depreciation is

concerned. Thus, only a share of the actual cost (of the purchase price or of the depreciation rate) can be

allocated to the project, calculated according to a fair, justified and equitable method.

B) Rent of equipment

It is also possible to rent equipment provided that the rental is the most economic and cost-effective way of

getting the equipment for the project purposes.

C) Leasing of equipment

The leasing of equipment is eligible if the total leasing fee does not exceed the cost of the rental of the same

item and relating to the same period of use in the project.

Reporting equipment costs


related payment:

- Documents evidencing that the most cost-efficient option for the features requested has been

selected and, where applicable, proof that public procurement rules have been respected;

- Evidence of the depreciation plan adopted for each equipment according to the national accounting

rules;

- For equipment only partially used for project’s purposes: statement showing the calculation method

to attribute a share of the actual cost to the project;

- Detailed invoice, clearly stating the date, the payee, the payer and (where possible) the title/acronym

of the project and the name of the Programme, detailed description of the goods

purchased/rented/leased, quantification of the goods, price per unit (if applicable) and total price.

- Where applicable, the declaration stating that the equipment is used by the project partners and

project target groups for the same purpose for at least five years after the completion of project

activities or that the equipment is part of the specific goal of the project.

- Proof of payment.


Examples of proof of payments for equipments


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o Payment orders;

o Receipted invoice showing the expenditure and or the payment;











Costs for second hand equipment are not eligible.

The depreciation amount must be charged (full or proportionally) in each related Progress Report. This

means that the full value of depreciated costs of equipment, in relation to the total project duration, cannot be

charged as total amount in one single period.

5.3.8. Investments

The investments budget line includes costs related to:

- financing construction works

- purchase of land (up to a limit of 10% of the total project budget)

- purchase of physical objects not falling into the scope of the equipment budget line and which may

be either linked or independent from the construction works or the purchase of land themselves.

Construction infrastructure and works may refer either to an investment that will be set up from the beginning

or to adaptation of an already existing infrastructure. Whatever the case, these costs are only eligible

provided that these investments have a cross-border character and a potential territorial impact.


Together with the existence of the necessary proof of expenditure and proof of payment, public procurement

rules60 should be carefully respected when awarding contracts for the realisation of works. Likewise, publicity

and information rules61 should be strictly followed.

Furthermore, and depending on the nature of the investment, all compulsory requirements set by Community

(where applicable) and national legislation related to the respective investment, and ensuring the respect of

environmental policies (e.g. feasibility study, environmental impact assessment, building permission, etc.),

must be fulfilled.

Additionally, all investments must be directly linked to project implementation and clearly mentioned in the

Application Form and they must be subject to on-the-spot checks by the First Level Controllers.

60 Please refer to § 4.2 for further details on public procurement rules. 61 Please refer to § 7 for further details on publicity rules.


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Finally, depending on the specific action implemented (construction work or purchase of land) specific

eligibility requirements must also be respected.

The existence of the project investment/s may be subject to FLCO verifications through on-the-spot checks.

A) Construction works

These costs comprise expenditure related to construction activities as constructions of buildings, works, and

infrastructure. Additionally they comprise also expenditure related to works needed for the reconstruction,

expansion or renovation of already existing building, works, and infrastructure.

For the above-mentioned types of actions, the amount has to reflect the actual costs in the context of the

project.

A. The full cost will be eligible only in case the implemented construction work is used exclusively for

project’s purpose and remain in use for the same purpose by the project partners and for the

project target groups for at least five years after the completion of project activities. Additionally,

Final Beneficiary, within five years from project end, shall avoid any substantial modification:

- affecting the nature of the construction work or its implementation conditions or giving to a

firm or a public body an undue advantage; and

- resulting from a change in the nature of ownership of infrastructure.

B. In case the implemented construction work is not used exclusively for project purposes, only a

share of the actual cost can be allocated pro-rata to the project. This share has to be calculated

according to a fair, justified and equitable method.

Valid and legally effective construction permit and/ or other document requested by national law for

investment are required to Final Beneficiaries before signing the IPA Subsidy Contract. The owner of the

permit must be partner in the project. In case these works do not require construction permit, the ownership

of investment should be defined among the project partners.

In case of a investment on real estate by a project partner who is not the owner, it is allowed to present a

proof of ownership of the real estate which is being state-owned, or public-owned in case of public

infrastructure. In case of project investing into real estate, which is owned by private legal or natural persons,

the partner is required to submit a long-term hiring agreement or easement contract (with a minimum validity

of 5 years upon project completion).

B) Land purchase

The cost of purchase of land not built on shall be eligible under the following four conditions:

- there shall be a direct link between the land purchase and the objectives of the co-financed project;

- the cost of land represents an amount up to 10% of the project eligible total budget;

- a certificate shall be obtained from an independent qualified assessor or duly authorized official body

confirming that the purchase price does not exceed the market value;

- the copy of draft contract of sale, showing that the land is free of any other burden has been

submitted before the signature of the IPA Subsidy Contract.

C) Other investments

Durable goods as physical objects not falling into the scope of the equipment budget line and which may be

either linked or independent from the construction works or the purchase of land themselves must be


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reported under this budget line, following the same rules for eligibility foreseen for “Equipment” (full price or

depreciation method).

Reporting investment costs


related payment:

- Documents evidencing the selection process, following the applicable procurement rules.

- Contract laying down the works to be provided, with clear reference to the project and to the

Programme. For contracts based on a daily fee, such fee together with the number of days

contracted and the total amount of the contract must be provided.

- Contract laying down the purchase of land in the framework of project and certificate obtained from

an independent qualified assessor or duly authorized official body confirming that the purchase price

of the land does not exceed the market value.

- Detailed invoice, clearly stating the date, the payee, the payer and (where applicable) the

title/acronym of the project and the name of the Programme, description of the works performed in

line with the contents of the contract, quantification of the work, price per unit (if applicable) and total

price.




- Evidence of the investment (e.g. documentation of the works, photographs...).

- Proof of payment.


Examples of proof of payments for investments

o Payment orders;

o Receipted invoice showing the expenditure and/or the payment;


Manager from which it clearly emerges the amount and the name of payee.;









Purchase, rent or leasing of existing buildings are not eligible costs as well as rent or leasing of land.

Costs of feasibility studies and environmental impact assessments needed prior to the realization of the

investment and delivered during project implementation should be allocated to this budget line.


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Equipment making part of the investment must be reported under the “Equipment” budget line.

5.3.9. Financial charges and guarantee costs

In this budget line shall be included:

‐ charges for transnational financial transactions;

‐ the bank charges for opening and administering the accounts where the implementation of a project

requires a separate account or accounts to be opened;

‐ the cost of guarantees provided by a bank or other financial institutions, to the extent that the

guarantees are required by national or Community legislation;

‐ the cost of guarantee requested from the private (not-profit) Lead Beneficiary only up to the same

amount as the cost of the guarantee covering the amount of the pre-financing (Commission

Delegated Regulation (EU) No 1268/2012 of 29 October 2012, Art. 20662).


Financial charges and guarantee costs are only eligible if they are directly linked to the implementation of the

project.

Depending on the type of cost (financial charges or guarantee costs) specific eligibility requirements must be

also respected.

A) Financial charges

In case of separate bank accounts opened specifically for project purposes, the bank charges paid by the

account holder (the Beneficiary) for setting up and administering the bank connection are eligible. In brief the

term bank charges covers all costs and fees required by a bank to their customers (i.e., periodical or slum

sum fee, registration costs for each entry, annual costs for cash dispenser management, bank statement

dispatch costs, mail costs for communication dispatch, costs for settlement or periodical closure).

Additionally, this budget line includes all the costs (charges) for transnational financial transactions carried

out (such as credit transfer order costs, costs for payment standing order...).

B) Guarantee costs

The cost of guarantees provided by a bank or other financial institutions are eligible to the extent that the

guarantees are required by national or Community legislation.

In the framework of the IPA Adriatic CBC Programme, according to the relative Call, private Lead

Beneficiaries and private Final Beneficiaries with no legal personality may be required to provide a financial

guarantee before the signature of the IPA Subsidy Contract.

In case of a guarantee required to a private Lead Beneficiary, the cost of guarantee, requested by the

Managing Authority is eligible ONLY up to the cost of the guarantee covering the amount of the pre-financing

as shown in the following example, since the only financial guarantee requested by national/Community

legislation is the one required by Art. 206 of the Commission Delegated Regulation (EU) No 1268/2012

concerning advance payment:

62 Previously Art. 182 of the Reg. (EC) 2342.


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Example of calculation of eligible guarantee costs for private Lead partner

a) Programme contribution 1.000.000,00

b) Cost of the guarantee for the Programme contribution (1%) 10.000,00

c) Advance payment: 20% of the Programme Contribution 200.000,00

d) Cost of guarantee for the pre-financing (c*1%) 2.000,00

Eligible guarantee cost 2.000,00

Instead, in case of a guarantee required to a private final Beneficiary with no legal personality, the full cost of

the guarantee is eligible and refundable by the Programme, since this financial guarantee is required by art.

198 of the Commission Delegated Regulation (EU) No 1268/2012.

Reporting financial charges and guarantee costs


related payment:

- Documents proving that all costs are real, directly related to the project and have not been declared

under other budget lines;

- Documents evidencing the opening of the bank account for the project (if any).

- Proof of payment.


Examples of proof of payments for financial charges and guarantee costs

o Payment orders;


Manager;

o Receipted payment orders or not transferable at sight checks or bank checks from which it

emerges clearly the amount and the name of payee. These documents must be accompanied

by a bank statement showing the cashing of the check;



o Receipt showing the expenditure and/or the payment;




Transnational financial transactions are always eligible under this budget line, whilst NATIONAL financial

transactions not falling under the category of “Bank charges” (either for the management of the bank

account, as it is a charge), could be eligible under this budget line ONLY where the implementation of the


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project requires a separate account or accounts to be opened. Otherwise, they must be reported under the

“Overheads” budget line.

Any other charge NOT related to a bank account specifically opened for the project, must be reported

under the “Overheads” budget line.

The following bank charges costs are NEVER eligible:

o stamp duty for the bank statement, as it is a current account holding fee (tax);

o possible charges for current account maximum overdraft (commissions that are charged by the bank

on the current account maximum overdraft).


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6. REPORTING, CONTROL AND REIMBURSEMENT

6.1. Reporting Activity

In the IPA Adriatic CBC Programme’s reporting takes place at two levels, at the partner level and at the

project level. There are three types of reports to be compiled at these levels:

o the Progress Reports at Final Beneficiary’s level;

o the Project Progress Report and Final Report at project level.

For the reporting process at project level, compulsory templates have been provided by the JTS and will be

available in the Project Management Toolbox, downloadable from the Programme website. The same goes

for the Project Progress Report and for the Final Progress Report, where compulsory templates have been

provided. All the reports must be filled out in English in all their parts.

The following paragraphs explain some requirements that must be respected for reporting and how to fill in

the model templates for the Final Beneficiary’s Progress Report as well as the Project Progress Report in

more detail. The description on how the Final Report shall be submitted will be instead explained in the

Chapter 8.1 of PMCM.

The following figure instead shows the full reporting procedure at Final Beneficiary and Project level:


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Figure 1: Reporting procedure at Final Beneficiary and Project level

6.1.1.1. Requirements for the costs to be reported

In addition to the general and specific eligibility requirements explained in Chapters 4 and 5, the following

requirements must be respected as well.

Beneficiary GR

Beneficiary SI

Beneficiary HR

Lead Beneficiary IT

PR

PR

PR

First Level Control Office (GR)

First Level Control Office (SI)

Project

Ppr

PR

de

de

de

de Programme

Management. and Information System

MA/ JTS

First Level Control Office (HR)

First Level Control Office (IT)

PR

PR

PR

Information flow

Documentary flow

de: data entry PR: Progress Report Ppr: Project Progress Report


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Budget limits

The reported expenditure must not exceed:

o the approved total project budget

o the approved budget of each Project Partner.

Generally speaking, the reported expenditures should not even exceed the approved total amount per

budget line and per Work Package (including budget limits as for preparation costs (see § 5.2 of PMCM),

otherwise they could not be reimbursed by the Programme. Every time Final Beneficiaries will report

expenditure over the available resources (per budget line, per WP or per Final Beneficiary) they may incur in

the so called “Over budget”, which means that some reported expenditures, having respected all the

eligibility rules, can be considered as eligible (and thus validated by the competent FLCO) but cannot be

reimbursed by the Programme.

Anyway, in duly justified cases, Final Beneficiaries may require adjustment to their budget allocation

(between WPs or budget lines) which must be authorized before being reimbursed63.

Conversion into Euro64

All amounts set in the IPA Subsidy Contract and in all the reports have to be shown in Euro.

In practice this means that Final Beneficiaries in participating Countries which have not adopted the Euro as

their currency on the date of submission of the expenditures to the national FLCO shall convert into Euro,

with an accuracy of two digits after the comma, the amounts of expenditure incurred in national currency.

The amount shall be converted into Euro using the monthly accounting exchange rate of the Commission in

the month in which the expenditure was submitted by the Final Beneficiary to the First Level

Controllers. The average monthly exchange rates set by the Commission are available at

http://ec.europa.eu/budget/inforeuro/. In such cases, the exchange rate should be rounded off to four digits

after the decimal comma, with 0,0005 being rounded up.

A part from the cases foreseen in § 6.1.2.2, Final Beneficiaries in participating Countries which have not

adopted the Euro as their currency on the date of submission of the expenditures to the national FLCO shall

also provide the “List of Expenditure”65 detailing individual cost items, the WP to which the activities and the

related costs are related, the budget line to which the costs have to be attributed, showing also the amount in

national currency and in Euro. Final Beneficiaries which void invoices before submitting them to the national

FLCO, may be exempted to present such “List of Expenditure”.

It is important to note that the IPA funds will be disbursed in Euro to the Lead Beneficiaries’ bank account

and that any exchange risk is borne by the Final Beneficiaries.

Display of figures

All the amounts have to be inserted in the reports using the system of 2 decimals, thus with an accuracy two

digits after the comma.

63 See § 3.4 of PMCM. 64 This paragraph refers only to the conversion into EUR of expenditure incurred by Final Beneficiaries in currencies other than EUR and does not relate to the reimbursement made to personnel (employees or external experts) which participates to project meetings held in Countries which have not adopted the EUR as national currency. In fact, project staff that participates to project meetings held in Countries with a currency different from the one of the Country where the Final Beneficiary is located may convert expenditure incurred in a currency different from the one of the Final Beneficiary that will reimburse that expenditure, by applying a fair and equitable rate of conversion, provided that a document that justifies the exchange rate applied is enclosed to their reimbursement request. 65 The JTS has provided a template of “List of Expenditure” that could be used by Final Beneficiaries which have not adopted the Euro as their currency on the date of submission of the expenditures to the national FLCO.


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In order to avoid rounding differences, Final Beneficiaries must then round off all expenditure to two digits

after the decimal comma (with 0,005 being rounded up), as shown in the following examples66:

Examples of rounding off

Amount of the expenditure: 176,374 EUR 176,376 EUR

Amount to be indicated in the report: 176,37 176,38

6.1.1.2. Timing for reporting

Final Beneficiaries must be aware that the general rule adopted by the Programme is to allow projects to

report expenditures whenever they are ready, given that, at least, the spending forecasts planned in the

Application Form will be respected in order to make sure that spending is reported in time to be included in

Programme claims and to ensure that projects are progressing.

This means that Final Beneficiaries define the spending pattern of their project since the submission of the

Application Form and commit themselves to keep this rhythm of expenditure during the implementation of

the project. In this way the Programme Authorities will be able to monitor the progress of the project,

verifying how the expenditure reported are far from the planned spending forecast and take the appropriate

measures in case of delay.

In practice, Final Beneficiaries can report their expenditures whenever they want, but are anyway

required to reach, through the submission of their Progress Reports, the level of expenditure foreseen in

the Application Form in the four different deadlines per year: by 31st January, by 30th April, by 30th June

and by 31st October of each year of the project duration. It is underlined that by these deadlines Progress

Reports composed of all their parts (see § 6.1.2.4) must be received by the competent First Level Control

Office.

Final Beneficiaries are then suggested to report expenditures as soon as they are incurred, taking into

account that, obviously, expenditure already reported in previous Progress Reports must not be reported

again.

Each Final Beneficiary shall submit its last Progress Report within 45 calendar days from the ending date of

the implementation period of the project, as stated in the approved Project Application Form.

6.1.1.3. Voiding expenditure documents

All original invoices and other probative documents must be voided by means of a stamp (or written by pen,

even if the use of a stamp is strongly suggested). The intent is to make explicit reference to the fact that the

expenditure has been co-funded by the Programme in order to avoid double funding and, in addition, to

make explicit the claimed expenditure for every item.

Therefore the sentence borne by the stamp (or by pen) has to provide at least the following information:

o the concerned expenditure has been co-funded by the IPA Adriatic CBC Programme;

o the code and the name (acronym) of the project;

o the amount reported67 or declared as eligible68. 66 For filling in the Financial Report into the MIS, Final Beneficiaries must be aware that in case of copy/paste (from e.g. booking software) more than 2 digits after comma can be pasted into the fields, although only 2 are visible. In such cases the automatic rounding functions of the system may lead to wrong calculations, thus Beneficiaries are strongly recommended to round off amount by themselves.


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An example of sentence that can be used is shown in the following table:

Expenditure incurred under IPA Adriatic CBC Programme, Project “<Acronym> - Code <Code>", for a sum of € ......, date…..

For Final Beneficiaries in participating Countries which have not adopted the Euro as their currency, the

amount reported or declared as eligible should be indicated both in the original currency and in Euro value:

Expenditure incurred under IPA Adriatic CBC Programme, Project “<Acronym> - Code <Code>", for a sum of <abbreviation of the original currency> <amount in the original currency>, equal

to € <amount in euro>, date…...

In case that invoices (and/or other probative documents) are available only on electronic support (i.e. no

original copy can be identified) the minimum information included in the stamp (as mentioned above) has to

be incorporated in the subject and/or in the content of the electronic document.

According to the control procedures in place in the different Participating Countries stamping can be

performed by the First Level Controller or by the Final Beneficiary. More detailed information will be given in

the Guidance for First Level Controller69.

6.1.2. (Final Beneficiary) Progress Report

The Progress Report presents the activities and costs of one Final Beneficiary for the given reporting period.

It contains information about activities and costs of the respective Final Beneficiary and has to be compiled

by all partners, including the Lead Beneficiary.

In fact, as laid down in the IPA Subsidy Contract, all Final Beneficiaries shall submit documents evidencing

the project progress and expenditures, since the grant payments are made on a reimbursement basis of the

eligible and refundable expenditure. In practice this means that each Final Beneficiary, including the Lead

Beneficiary, must have their own costs verified by their national First Level Controller.

The reporting of expenditure incurred by Final Beneficiaries for the project implementation is done through

the Progress Reports which must be submitted to the competent FLCO.

The Progress Report is composed of:

o Activity Report that provides information on the activities implemented in the related period of

reporting, outputs produced, Final Beneficiary’ declarations (statement on VAT status, update on

declaration of state aid received, respect of equal opportunities principles), revenues produced and

o Financial Report which provides information on project’s expenditure per budget lines and WP.

Any Progress Report must be supported by documents proving the eligibility of expenditure (proof of

expenditure, proof of payment, documents relating to public procurement, etc)70.

67 In case the invoice is voided by the Final Beneficiary. 68 In case the invoice is voided by the competent FLCO. 69 For Final Beneficiaries from Slovenia, Bosnia and Herzegovina, Montenegro, Croatia and Serbia expenditure documents will be voided by the competent FLCO. Final Beneficiaries located in Italy, Albania and Greece must instead void these documents before submitting them to the national FLCO. 70 See sub-paragraph 6.1.2.3.


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6.1.2.1. Activity Report

The Activity Report relates to the work performed and results achieved by the Beneficiary in the considered

period of reporting71, highlighting the state of project implementation, the description of activities carried out,

and the outputs and results achieved according to the project work plan.

The Activity Report shall be coherent with the activities, objectives, results and the time schedule described

in the approved Application Form. If not, related motivations for eventual deviation and envisaged activities

to catch up with the delays shall be provided. If relevant, the description should also provide information on

the main challenges that occurred and how the project dealt with them or what actions have been foreseen

to deal with them.

By filling in the Activity Report the Final Beneficiary will also confirm/declare the VAT status, any revenue

generated during the project implementation and, for Final Beneficiaries granted by the Programme under

the de minimis regime, the update of the funds received under the de minimis regime over the three-year

financial period before the related period of reporting. Additionally, by signing the Activity Report, Final

Beneficiary also confirms that the provisions concerning equal opportunities for men and women as well as

combating discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual

orientation have been respected.

Final Beneficiaries must use the Activity Report template (excel file) provided by the Programme and fill in

all its parts, in conformity with the information provided in the Financial Report.

Before submitting it, the Activity Report must be sent previously (also by email) to the Lead Beneficiary which

must sign and stamp the Activity Report in the spaces indicated being responsible to ensure that the

expenditure presented by the Final Beneficiaries participating in the project has been paid for the purpose of

implementing the project itself and that corresponds to the activities agreed among the involved Final

Beneficiaries72. The signed Activity Report by the Lead Beneficiary must be returned (also scanned by email)

to the Final Beneficiary73.

The Final Beneficiary has then to upload the Activity Report, signed and stamped both by the

legal/authorized representative of its institution and of the Lead Beneficiary’s institution, into the M.I.S.

6.1.2.2. Financial Report

The Financial Report relates to the expenditure incurred during the concerned period of reporting, per budget

lines and WP and must be filled in directly into the MIS.

Each expenditure or revenue74 should be listed according to the related Work Packages and budget line to

which it refers, in connection with the supporting invoices, or other accounting documents of equivalent

probative value.

Final Beneficiaries must be aware that the total amounts indicated in the Financial Report must be identical

to the ones declared in the Activity Report, otherwise the First Level Controller could not validate the

accounted expenditures.

71 A “period of reporting” is calculated automatically, taking the date of the oldest date among the supporting documents of receipt as a start date, and the date most recent one as the end date of the period of reporting. 72 Art. 96.1(d) of the IPA Implementing Regulation. 73 Lead Beneficiary and Final Beneficiaries must agree on the procedure to be followed (i.e. the FB prints, stamps and signs the Activity Report before submitting it to the LB) and on timing. It is strongly suggested that the LB sends back the signed Activity Report in due time in order to speed up the Final Beneficiary’s procedure of submitting the Activity Report to its FLCO since a delay can affect the timely implementation of the partner’s activities and when applicable also the applied monthly exchange rate. 74 The amount of revenues generated during the project implementation and interest accruing on Programme contribution paid in pre-financing must be indicated in the Financial Report with minus sign.


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6.1.2.3. Attachments to the Progress Report (supporting documents)

Any Progress Report must be supported by documents proving the eligibility of expenditure as:

o invoices and accounting documents of equivalent probative value related to project expenditure;

o other documents as: bank statements, contracts, timesheets, boarding passes, evidences of the

selection procedure, etc.

o public procurement documents, in case of awarding service/s, contracts for works or supply;

o project deliverables as: promotion materials produced during the project period, list of participants

and minutes of meetings; copy of the materials produced directly linked to events, etc.

o list of expenditure, where required;

o for Final Beneficiaries located in the Participating Countries which have not adopted the euro as their

currency, the page of the InforEuro website showing the monthly exchange rate;

o any other document useful for checking compliance with national legislation that the national First

Level Controller might require.

Invoices and accounting documents of equivalent probative value related to project expenditure shall be

submitted according to the procedure established by the related FLCO. This means that those Final

Beneficiaries which are required to void their invoices before submitting them, must provide to the competent

FLCO a true/certified75 copy of the invoice after stamping it as explained in previous § 6.1.1.3. For Final

Beneficiaries whose invoices are voided by the competent FLCO, these invoices must be instead sent in

ORIGINAL.

In case of awarding service, supply or work contracts exceeding EUR 20.000, the Final Beneficiary is asked

to provide the “Contract award declaration”, on the JTS template by uploading the declaration into the MIS

when submitting the documents proving the tender procedure carried out76.

Final Beneficiaries must perform an administrative and accounting self-evaluation on the documentary

evidences to support their own Progress Report before submitting it to the competent FLCO, using the check

list for self-evaluation provided by the JTS.

6.1.2.4. Submission of the Progress Report

The Progress Report (Activity and Financial Report, as well as the “Contract awarded declaration” when

required) must be firstly submitted through the M.I.S..

After this, the Final Beneficiary must send by ordinary mail/courier to the competent First Level Control

offices77 a complete paper version of:

o the file pdf. produced by the M.I.S. named “Progress Report” (containing a declaration and the

financial report), which must be printed, signed and stamped by the Legal/authorized representative

of the Final Beneficiary;

75 The purpose of the certification of the required documents is to confirm that the submitted copies correspond to the original. This certification can be given by any authorised person of the participating Beneficiary by stating on the document “Corresponding to the original” and having this statement signed, stamped and dated. 76 The “Contract award declaration” is needed only for the Managing Authority to monitor that Final Beneficiaries are duly respecting the public procurement provisions referred to in Article 121 of the IPA Implementing Regulation No. 718/2007. In case this declaration is not submitted the related expenditure will be anyway considered as eligible (provided that all the eligibility requirements are respected), but the concerned Final Beneficiary shall promptly submit the Contract award declaration upon request of the concerned FLCO or MA/JTS. 77 The addresses of the National FLC offices are listed in Annex I of this document.


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o all necessary documents supporting the reported expenditures.

The following image shows the steps to be followed for submitting a Progress Report: Figure 2: Progress Report procedure

More detailed and technical information on how to submit the Progress Report through the MIS are given in

the guidelines produced by JTS: “Guidelines for the use of the Programme Management and

Information System - M.I.S. (Instruction on how to submit Progress Reports and Applications for

Reimbursement)”78.

Additional specification on the submission of the paper version of the Progress Reports may be given in the

Guidance for First Level Controller.

6.1.3. Project Progress Report

The Project Progress Report presents the state of the implementation of the whole project. It is compiled by

the Lead Beneficiary on a six-monthly basis and contains a summary of the activities and costs of all Final

Beneficiaries of the project for the related period.

The purpose of the Project Progress Reports is to enable the Programme Joint Monitoring Committee,

Managing Authority and the Programme Joint Technical Secretariat to follow, monitor, keep informed about

and to be able to inform others about the progress and achievements of the project.

In particular, the Project Progress Reports may describe progress in achievements of planned milestones,

delivery of outputs and financial progress and should include information on main challenges and

deviations/delays occurred during the reporting period, if any.

Thus the Project Progress Reports shall contain:

78 Available in the Programme website.


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o progress report detailing project activities as a whole, achievement of outputs and results;

deliverables produced and

o financial reporting regarding validated expenditures and the submitted applications for

reimbursement;

o relevant enclosures as communication and publicity documents.

The Project Progress Reports must be submitted by the Lead Beneficiary to the MA (through the JTS) twice

per year: by 30th April and by 31st October.

Where the Lead Beneficiary fails to submit a Project Progress Report by the given deadline, it must inform

the Managing Authority of the reasons why it is unable to do so. However, it has to justify in a summary the

progress made in the Project following the previous Project Progress Report. If the Lead Beneficiary fails to

justify the breach of this obligation, the Managing Authority may suspend any application for reimbursement

or terminate the IPA Subsidy Contract in conformity with the General Conditions of the IPA Subsidy Contract.

6.1.3.1. Submission of the Project Progress Reports

The Project Progress Report must be filled out in English on compulsory, pre-filled templates provided by the

Joint Technical Secretariat79.

They have to be submitted to the JTS both in original hard copy and electronically. The electronic version

(excel format) must be sent via e-mail to [email protected], whilst the paper version with all the

relevant enclosure must be sent via normal mail/courier dully signed and stamped to the JTS premises.

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6.2. Validation of expenditure

The Managing Authority has the overall responsibility for verifying the regularity of expenditure80. Each

Country designated the controller/s responsible for verifying the legality and regularity of the expenditure

declared by the Final Beneficiaries established in its territory. Consequently each Progress Report submitted

by every Final Beneficiary participating in a project has to be verified and confirmed by the First Level

Control Office established in the related Country.

The main aim of the control systems is to provide a guarantee for the Managing Authority, the Certifying

Authority and to the project itself that costs are reported and claimed in accordance with the legal and

financial provisions of the Programme rules, as well as the Community regulations and national rules.

However, within the Programme, additionally to the first level controls, expenditure incurred and paid out by

each Final Beneficiary may undergo a number of verifications by different actors.

All these actors have the possibility to see the Progress Report through the Management and Information

System of the Programme that envisages accesses with specific profiles according to the role played by

each of them within the Programme.

6.2.1. The different control levels

6.2.1.1. The First Level Control

The IPA Adriatic CBC Programme has a single Control System organized in one Office for each participating

State. Each State has established a First Level Control Office for the first level controls which has the

responsibility for verifying the legality and regularity of the expenditure reported by all Final Beneficiaries on

their territory participating in the operations, each relating to the Progress Reports submitted (see Annex I

with the list of the FLCO per Country).

According to Art. 108.1 of the IPA Implementing Regulation, the control performed by the First Level

Controller (FLC) makes possible to verify:

- the delivery of the products and services co-financed;

- the soundness of the expenditure declared for project or parts of project implemented on its territory;

- the compliance of such expenditure and of related projects, or parts of those projects, with

Community, Programme and, when relevant, with national rules.

Besides the Programme’s documents (Operational Programme, Implementation Manual, Applicants’ Manual

for the reference Calls, the present PMCM), the Programme also provides to the First Level Controllers the

tools for verification and validation of expenditures (Guidance for First Level Controller, guidance for the use

of the M.I.S., templates of checklists…) to be used in their work. These documents are available on the

Programme website.

6.2.1.2. On-going controls by the Managing Authority/Joint Technical Secretariat

The Managing Authority (or the JTS on its behalf) may also perform on-going controls focused on the

delivery of activities in relation to the work plan presented in the Project Application Form and compliance

with non-financial rules such as those on publicity and information.

80 According to Art. 103.1 of IPA Implementing Regulation as amended, the Managing Authority is responsible “for verifying the regularity of expenditure. For this purpose, the relevant provisions of Article 13 of Regulation (EC) No 1828/2006 shall apply mutatis mutandis. The managing authority shall satisfy itself that the expenditure of each final beneficiary participating in an operation has been validated by the controller referred in Article 108”.


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Anyway, it must be highlighted that, during the monitoring of the Project Progress Report (and also of the

activity section of the Progress Reports), the Joint Technical Secretariat will verify the true existence of the

project, not only that it is “living” on the paper and spending, but that the implementation of its activities is

real and ongoing, and going towards the set results and objectives, by analysing all relevant outputs

delivered by the project as enclosures to the Project Progress Report (e.g. agenda, minutes and list of

participants of meetings held, promotional material, studies, etc)81.

If the information delivered in the Progress Reports is insufficient, the MA/JTS will ask for further information

or clarification to the Final Beneficiaries that should provide the answers to the Managing Authority/Joint

Technical Secretariat within the set timeframe.

The MA is also responsible for checking that all Final Beneficiaries’ Progress Reports have been validated

by the competent FLCO before authorizing the payment of an Application for Reimbursement (the Lead

Partner should have already checked this once before submitting the claim).

It should be noted that the controls performed by the Managing Authority/JTS may result in additional

requests for clarification to the Lead/Final Beneficiary, even if the Progress Report was technically validated

by the FLCO, and might bring to recovery of unduly paid amounts82.

6.2.1.3. Other Programme actors involved in control

According to Art. 104 of IPA Implementing Regulation, the Certifying Authority has the responsibility for

certifying that the reported and validated expenditure complies with applicable Community and national rules

and has been incurred in respect of the selected project in accordance with the criteria applicable to the

Programme and complying with Community and national rules.

Under provisions of Art. 105 of IPA Implementing Regulation, second level audits are performed by the

Audit Authority (Group of Auditors).

Other checks might also be performed on the project by other auditing bodies of the European Union

according to Art. 119 of Reg. (CE) 718/2007.

It should be noted that the controls performed by these bodies (Certifying Authority, Audit Authority other

bodies) may result in additional requests for clarification to the Lead/Final Beneficiary and could eventually

bring to recovery of unduly paid amounts.

6.2.2. Procedure for expenditure’s validation

Once received the hard copy of the submitted Progress Reports, the National First Level Control Office will

carry out verifications covering administrative, financial, technical and physical aspects of projects.

Besides what said in the previous paragraph of this chapter, verifications shall ensure specifically:

- that the costs are eligible and sufficiently supported by invoices or accounting documents of

equivalent probative value;

- that the expenditure has been incurred for the purpose of implementing the project in accordance

with the contents of the IPA Subsidy Contract, including the latest version of the approved

Application Form which is an integral part of the contract itself83;

81 The annexes to the Project Progress Report (e.g. agenda, list of participants to meetings and events, promotional material, publications, press releases, etc.) as proof of the realization of the project activities and of Programme visibility, in some cases can be also provided in electronic version by an electronic device (e.g.: scansion of the list of participants, file of the press notice published on a website, brochures). 82 See § 4.8 of the PMCM.


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- the reality of the reported expenditure (activities have actually taken place and products and services

have been delivered);

- the compliance of the expenditure with applicable rules on public procurement, State Aid, publicity

and information, protection of the environment and equal opportunities.

In order to be sure that the activities reported in the Progress Reports by Final Beneficiaries have been

actually implemented, the products/outputs delivered, the works concluded or on-going, the equipments

purchased, First Level Controller will make administrative verifications (“desk-based checks”) for each

submitted Progress Report (covering 100% of the reported expenditure), which can be also integrated by on-

the-spot checks to a sample of Progress Reports.

83 In case of amendments of the Application Form and/or of the IPA Subsidy Contract and Partnership Agreement, the latest version/s will be made available for the competent controller by the Managing Authority.


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Figure 3: Validation Procedure Chart

6.2.2.1. Administrative verification (desk-based checks)

Desk-based checks are verifications made with the help of the supporting documents (§ 6.1.2.3) submitted

by the Final Beneficiaries with every Progress Report.

The verification of the supporting documents makes possible administrative and financial checks of 100% of

the expenditure declared by the Final Beneficiary in the Progress Reports.

In addition, during the “desk-based checks” FLC checks that:

o the submitted Progress Report is correct and consistent with the supporting documents;

Beneficiary GR

Beneficiary SI

Beneficiary HR

Lead Beneficiary IT

PR

DVE

First Level Control Office (GR)

First Level Control Office (SI)

First Level Control Office (HR)

SC

MA JTS AR

Programme Management and

Information System

First Level Control Offices

DVE

PR

DVE

SC

SC

PR

First Level Control Office (IT)

DVE

PR

SCAR

DVE: Declaration on Validation of Expenditure PR: Progress Report SC: On-the-spot checks AR: Applications for Reimbursement

Information flow

Documentary flow


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o possible revenues, detailed in the Activity Report, have been deducted from the total eligible

expenditure;

o the reported expenditure is not affected by irregularity or any suspected irregularity.

The First Level Controllers may also ask the Final Beneficiaries to provide additional documentation in

addition to the documents annexed to the Progress Report. The Beneficiaries should provide the answers

within the set timeframe in order to speed up the procedure of expenditure validation.

For Final Beneficiaries in participating Countries which have not adopted the Euro as their currency on the

date of submission of the expenditures to the national FLCO, the First Level Controller verifies also the

correctness of the exchange rates used to convert expenditure incurred in the national currency of those

Participating Countries, as explained in § 6.1.1.1 of the PMCM.

Additional information will be given in the Guidance for First Level Controller.

6.2.2.2. On-the-spot checks

Administrative verifications are not sufficient to give assurance on the legality and regularity of expenditure,

thus it is essential that on-the-spot verifications are carried out. The on-the-spot checks make possible

technical and physical verifications in addition to the administrative checks because the portfolio of checks

available on-the-spot is larger compared to the one available for administrative verifications.

The First Level Controller will then perform on-the-spot checks in order to check in particular the reality of

project and to be sure that the activities reported in the Progress Reports have been actually done, the

products/outputs delivered, the works concluded or on-going, the equipments purchased and the

investments realized.

The on-the-spot checks are even an obligation but are performed on a sample basis in order to proportionate

the means invested in going on-the-spot to the expenditure to be checked. In general the on-the-spot-checks

shall cover at least the following verifications:

- the existence and effective functioning of an accounting system on the level of each partner, either

separate or analytical-based, allowing for a clear identification of all project-related expenditure and

avoiding the possibility of double-funding;

- adequacy of supporting documents and of the existence of an adequate audit trail;

- the reported services/equipments/investments have been delivered in reality, and are available at

the premises of the project partner, and are used in line with the project purposes;

- compliance with national and Community rules;

- the publicity rules and requirements of the IPA Adriatic CBC Programme have been respected.

Additional information about on-the-spot check will be given in the Guidance for First Level Controller.

6.2.2.3. The Declaration on Validation of Expenditure (DVE)

After completing all verifications (both the administrative checks and (if in case) on-the-spot checks), the

competent First Level Control will issue a Declaration on Validation of Expenditure (DVE) within a period

of three months from the date of submission84 of the relative Progress Report (if no integrations have been

required), which proves that the expenditures have been validated.

The DVE is drawn up at Programme level, has the same content for all checked Progress Reports and is

obligatory to be used by each FLC. It has to be issued in Euro only.

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In particular the Declaration on Validation of Expenditure consists of four main parts85:

Declaration The First Level Controller declares in details that all the necessary verifications have been done, and declares, among other things, the amounts of expenditure reported and checked and the eligible expenditure.

Annex A The First Level Controller reports in details on the method of verification and on the findings of the desk-based checks and the findings of on-the-spot checks (if in case).

Annex B The submitted Progress Report to which the DVE refers to.

Annex C Control Check list(s) filled by First Level Controller.

A detailed explanation of the ineligible (thus not validated) expenditure, will be provided by the First Level

Controller in the issued DVE.

The Declaration on Validation of Expenditure is issued by the FLC through the M.I.S. When a DVE is issued

by a FLCO, the Final Beneficiary, which submitted the Progress Report, the Lead Beneficiary, of the

concerned project, and the Managing Authority will immediately see the DVE in the M.I.S.

Moreover, the First Level Controller has to print and sign the DVE in original and send it in hard copy

together with obligatory annexes to the Final Beneficiary that has submitted the relative Progress Report86.

In case the DVE does not include some expenditures because their checking have been deferred, waiting for

integrations, the above-mentioned deadline of three months is meant interrupted only for those reported

expenditures not completely checked. In this case the FLC will send through the M.I.S. a request for

integration to the Final Beneficiary which shall answer within the given deadline. After receiving the further

documentation, the FLC will check again those expenditures and decide whether to validate them or not. The

proof of this further validation, always related to the same Progress Report, will be an additional DVE,

connected to the one already issued. This additional DVE will be sent to the Final Beneficiary with the same

method used for the first DVE.

All those steps will be tracked in the M.I.S.

When the Lead Beneficiary of a project sees in the M.I.S. that there are one or more issued DVE/s87, it can

start the procedure for drawing up an Application for Reimbursement (AR) of the validated expenditures (see

the following § 6.3.2).

85 See Annex II of the PMCM. 86 The First Level Controller will scan, upload, and finally store, the signed original DVE, together with obligatory annexes sent to the FB, in the Management and Information System. For more details on this procedure, see Guidance for First Level Controller. 87 Once a DVE has been issued by the competent FLCO, the concerned Final Beneficiary and its Lead Beneficiary will receive a notification through the M.I.S.


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6.3. Reimbursement

This paragraph and the following sub-paragraphs outline the main rules and requirements related to the

payment procedure within the IPA Adriatic CBC Programme.

The total budget of project selected for funding is co-financed up to a maximum rate of 85% by the

Community (IPA) fund, while the remaining budget is covered with national co-funding, ensured by each

Final Beneficiary according to the national co-financing system established by its Country of origin.

Therefore, while the IPA funds are always reimbursed by the Programme through the Lead Beneficiary, each

participating Country applies a different system to provide the national co-funding and, in case, to reimburse

it to Final Beneficiaries.

This being said, the payment of the Community and (where applicable) of the national contribution granted to

the project will be done with the reimbursement method, which means that any eligible expenditure will be

reimbursed by the Programme if it has been incurred by the Final Beneficiaries, verified and validated by the

national First Level Control Office and if the Managing Authority has received an Application for

Reimbursement from the Lead Beneficiary.

In addition, Lead Beneficiaries and Final Beneficiaries are entitled to receive an advance payment after the

signature of the IPA Subsidy Contract.

6.3.1. Pre-financing payment

After the signature of the IPA Subsidy Contract the project may receive a pre-financing payment up to a

percentage of the Community contribution assigned to the whole Project88.

Lead Beneficiaries shall submit to the Managing Authority a pre-financing payment request89 and, once

received it, the pre-financing shall be transferred by the Lead Beneficiary to each Final Beneficiary,

according to the share of pre-financing payment defined in the Partnership Agreement.

The received pre-financing amount will be deducted pro-rata from the interim reimbursement payments and

the final deduction will be made with the last reimbursement payment. If the pre-financing is not deducted

before the payment of balance or before the Contract termination, the due amounts must be returned to the

Programme in the same terms set out under Article 18 “Recovery Procedure” of the General Conditions of

the IPA Subsidy Contract in force. The method according to which the pre-financing payment will be

deducted from the submitted Application for Reimbursement is shown in the following table.

88 Under the condition that the MA has yet received by the European Commission the Programme pre-financing payment. 89 A template of “Pre-financing payment request” is available in the Programme Management Toolbox.


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Example of the Pre-financing method

Total Programme contribution (A) 2.500.000,00

Community contribution (b=A*85%) 2.125.000,00

National co-financing (nc=A*15%) 375.000,00

Advance payment (c=b*20%) 425.000,00

First application for reimbursement (ar1) 125.000,00

Community contribution of the first application for reimbursement (e1=ar1*85%) 106.250,00

National co-financing (nc1=ar1*15%) 18.750,00

First Community contribution reimbursed (f1=e1*80%) 85.000,00

Second application for reimbursement (ar2) 1.000.000,00

Community contribution of the second application for reimbursement (e2=ar2*85%) 850.000,00


Second Community contribution reimbursed (f2=e2*80%) 680.000,00

Third application for reimbursement (ar3) 500.000,00

Community contribution of the third application for reimbursement (e3=ar2*85%) 425.000,00


Third Community contribution reimbursed (f3=e3*80%) 340.000,00

Fourth application for reimbursement (ar4) 500.000,00

Community contribution of the fourth application for reimbursement (e4=ar4*85%) 425.000,00


Fourth Community contribution reimbursed (f4=e4*80%) 340.000,00

Fifth application for reimbursement (ar5) 375.000,00

Community contribution of the fifth application for reimbursement (e5=ar5*85%) 318.750,00


Fifth Community contribution reimbursed (f5=e3*80%) 255.000,00

Total Community Contribution reimbursed (c+f1+f2+f3+f4+f5) 2.125.000,00

6.3.2. Submission of the Application for Reimbursement

An Application for Reimbursement (AR) is the request through which the Lead Beneficiary of a project

asks to the Programme to have the reimbursement of the eligible and refundable expenditures for all Final

Beneficiaries.

Every time one or more DVE/s has/have been issued, the Lead Beneficiary can draw up an Application for

Reimbursement of reported, validated and refundable expenditure and submit it to the Managing Authority.

AR must be firstly presented through the M.I.S. and then printed, signed and stamped and submitted in hard

copy to MA/JTS.

For technical information, Lead Beneficiaries are advised to consult the “Guidelines for the use of the

Programme Management and Information System - M.I.S. (Instruction on how to submit Progress Reports

and Applications for Reimbursement)” available on the Programme website.


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6.3.3. Programme reimbursement system

Once received the signed Application for Reimbursement, the Managing Authority/JTS will control the

correctness of it taking into account the implementation of the entire Project and, within 45 calendar days (or

60 calendar days for Projects which are particularly complex to evaluate) from the date on which the AR was

received90, issues a Payment Order (PO) and sends a reimbursement order to the Treasury of the

Programme in order to proceed with the reimbursement. Due sums shall be paid by the Treasury of the

Programme within no more than 45 calendar days from the date on which an admissible payment request is

authorised by the Managing Authority (as ruled under Art. 16.6 of the General Conditions of the IPA Subsidy

Contract).

A notification on the issue of the Payment Order from the Managing Authority will be submitted through the

M.I.S. to all Final Beneficiaries concerned by that specific AR.

The reimbursement of the IPA funds of the whole project (thus of all Final Beneficiaries) will be made on the

LB’s bank account. Once received these funds from the Treasury of the Programme, the Lead Beneficiary is

obliged to transfer in time (according to what established in the Partnership Agreement) and in full the share

of IPA which corresponds to each Final Beneficiary.

The national co-financing reimbursement, if due, will instead follow the rules established by each

participating Country, according to the specific national co-financing system set up, namely:

o the share of national co-financing of Italian Final Beneficiaries is guaranteed by the National

Rotation Fund, established by art 5 of Law 183/1987; based on the agreement between the

Managing Authority and the Italian Ministry for Economic Development – DPS, those Beneficiaries

are not required to submit other claims for the reimbursement of the corresponding national share of

co-financing;

o Beneficiaries from Greece will receive national co-financing by state funds according to the legal

provisions of the national management and control system regarding European Territorial

Cooperation Programmes; in order to receive the payment of the corresponding national share of co-

financing from state funds, Final Beneficiaries must submit a letter requesting the national co-

financing to the Greek Managing Authority of European Territorial Cooperation Programmes;

o the share of national co-financing of Slovenian Final Beneficiaries is guaranteed by the

Government Office for the Development and European Cohesion Policy in order to receive the

payment of the corresponding national share of co-financing, Final Beneficiaries must submit a

reimbursement request in line with the requirements set in the Guidelines for Reporting for Slovenian

Beneficiaries published by the Government Office for the Development and European Cohesion

Policy.

The figure below shows the different steps of the cash flow during reimbursement procedure:

90 From the date of receiving the hard copy AR.


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Steps of reimbursement procedure

1 Transmission of the Progress Report to the competent FLCO

2 Verification of the Progress Report by the FLCO

3 Declaration on Validation of Expenditure issued by the FLC and transmitted to Beneficiary and through the M.I.S. also to LB, MA and CA.

4 Elaboration and submission of the Application for Reimbursement (AR) by the LB

5 Verification by the MA/JTS of the submitted AR and approval

6 Order of payment issued by the MA to the Programme Treasury for making reimbursements to LB

7 The LB will receive the IPA funds.

8

All Beneficiaries will receive the IPA funds by the LB according to the share reported by each of them. National co-financing (where applicable) will be reimbursed to Final Beneficiaries according to the national co-financing system.


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Figure 4: Reimbursement procedure

PT: Programme Treasury PO: Payment order IT FB: Italian Final Beneficiary SI FB: Slovenian Final Beneficiary GR FB: Greek Final Beneficiary HR FB: Croatian Final Beneficiary AR: Application for Reimbursement ARn: Application for Reimbursement of National Funds NCi: Italian National co-financing NCs: Slovenian National co-financing NCg: Greek National co-financing CCt: Total Community co-financing CCb: Beneficiary’s Community co-financing

SI FB GR FB

HR FB

Lead Beneficiary

Greek MA

Government Office for the Development

and European Cohesion Policy

(SI)

CCt

CCb

CCb

CCb

CCb

NCs

NCg

PT

Financial flow

IT FB

MA/JTS

AR

PO

Documental flow

ARn

NCi

ARn


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7. PROJECT COMMUNICATION AND VISIBILITY91

In the programming period 2007-2013 the role of communication and visibility activities at project level has

been strengthened, since the previous programming period showed that communication and visibility

activities are practical and efficient measures to improve the quality of the projects and to make projects'

results visible as much as possible.

During implementation each Final Beneficiary of the IPA Adriatic CBC Programme has to undertake a set of

activities to make available and to publicize the assistance obtained from the European Union92.

Therefore Final Beneficiaries are strongly encouraged from the very beginning to plan their communication

and visibility activities which have to accompany the whole project lifecycle.

Even though communication and publicity may be considered interchangeable, they have a different purpose

in time and coverage terms.

Main differences between communication and publicity

Communication

- Connecting with target audience;

- Obtaining feedback and follow up on the impact from activities;

- More targeted;

- Carried out throughout the lifetime of the project.

Publicity

- Spreading information about project;

- Usually one way – little room for feedback;

- Wider audiences;

- Mainly carried out at implementation and especially at project close

phase.

Good communication is central for the success of any project and thus for the Programme itself. Effective

communication enables not only a shared understanding of project’s objectives and results, but it also raises

necessary visibility of EU role and of the Instrument for Pre-Accession Assistance outside the “project

bunch”.

Both communication and visibility activities have the following general scopes:

- to increase transparency in the use of European Union funds during the Project implementation,

- to achieve the knowledge of the activities and the joint cooperation strategy,

- to raise awareness of the main project’s achievements and results among the specific target groups

and the general public,

- to let citizen know the benefits obtained in the involved territories.

During the submission process the partnership agreed on the project’s communication and visibility activities

describing them mainly in a devoted WP (WP2) but also envisaging them in other WPs planning also specific

expenditures. During the implementation phase, the planned activities will be implemented and, whenever

91 Main source: ”Territorial Cooperation Project Management Handbook” published by INTERACT. 92 According to Articles 62-63 of Implementing Regulation.


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they are carried out or whoever are the addressees, they shall comply with all the requirements respecting

both the indications given by the relevant EU regulations and those specific given by the Programme.

Therefore the expenditures related to communication and visibility activities that do not comply with

the requirements described in this chapter are considered as ineligible. Copy of any visibility and

communication material (e.g. publications, CDs, etc.) produced during the implementation of the project by

any of its Project’s partner have to be provided to demonstrate that these requirements have been

respected93.

The following paragraphs will guide the Final Beneficiaries in implementing their communication and visibility

activities.

Additionally, Final Beneficiaries are suggested to consult the “Communication and Visibility Manual for

European Union External Actions” in the EuropeAid website: http://ec.europa.eu/europeaid/work/visibility/index_en.htm

7.1. Strategy and content of the Project Communication plan

In the Application Form Final Beneficiaries are required to describe the project communication,

dissemination and publicity activities identifying specific objectives, target groups, disseminating materials,

tools and advertising medium.

It is strongly recommended that the approved projects arrange the communication and dissemination

measures in a communication plan as soon as the project starts on the basis of the project topic, the

foreseen resources and the nature of the project.

First of all, drawing a communication plan does not have to be meant as an additional burden for the

projects, but as a means to better arrange the projects communication, visibility and publicity activities

defined in the Application Form94. The project implementation and all the involved parties (Programme’s

bodies, target groups and partners themselves) will benefit from a clear definition of the communication

strategies.

The communication plan should briefly specify aim and purpose of the planned communication and visibility

activities, how the achieved results are widely disseminated and capitalized according to the specific

addressees/target groups, which are the communication responsibility among partners and the relevant

financial resources. In addition, it is aimed at specifying the visibility and communication tools to be used for

disseminating the results, the time frame and the different initiatives to which the project will be presented or

the public events that will be organized adding further information respecting what stated in the Application

Form.

Specifically, in order to draw up the communication plan, the following questions should be answered:

‐ What is the project trying to achieve?

‐ Are objectives clear, achievable and measurable?

‐ Who is the project’s audience?

‐ What do we want to say?

‐ Which communication tools will be most appropriate?

‐ When do we want to communicate?

‐ Who will deliver the message?

‐ How will the communication plan’s progress be monitored and measured?

93 The Lead Beneficiaries must provide these materials together with the periodical Project Progress Report. For further details see also § 6.1.2.3 of this PMCM. 94 See also § 2.3.2 of this PMCM.


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The communication plan should be a brief but comprehensive document (if possible not exceeding 10

pages) highlighting the external communication activities that need to take place at key stages in the life of

the project. The level of detail should be commensurate with the nature, extent and cost of the

communication activities envisaged, even though the communication plan should include the realization of at

least the following:

- project logo (recommended)

- project website (recommended)

- project brochure presenting the results

- public event at project end.

The following template95 can be useful to draw up a communication and visibility plan:

Communication and Visibility Plan Template

GENERAL COMMUNICATION STRATEGY

Objectives 1.Overall communication objectives

2.Target groups

‐ Within the Country(ies) where the project is implemented

‐ Within the EU (as applicable)

3.Specific objectives for each target group, related to the project’s objectives and the phases of the project cycle Examples of communication objectives:

‐ ensure that the final beneficiary population is aware of the roles of the partner and of the EU in the activity

‐ raise awareness among the participating Countries or in Europe of the roles of the partner and of the EU in delivering aid in a particular context

‐ raise awareness of how the EU and the partner work together to support education, health, environment, etc. COMMUNICATION ACTIVITIES

4. Main activities that will take place during the period covered by the communication and visibility plan Include details of:

‐ the nature of the activities

‐ the responsibilities for delivering the activities

5. Communication tools chosen

‐ Include details of advantages of particular tools (media, advertising, events, etc.) INDICATORS OF ACHIEVEMENT

6. Completion of the communication objectives

‐ Include indicators of achievement for the different tools proposed

7. Provisions for feedback (when applicable)

‐ Give details of assessment forms or other means used to get feedback on the activity from participants RESOURCES

8. Human Resources

‐ Person/days required to implement the communication activities

‐ Members of the management team responsible for communication activities

9. Financial resources

‐ Budget required to implement the communication activities (in absolute figures and as a percentage of the overall budget for the action)

95 Based on the “Communication and Visibility template” suggested by the “Communication and Visibility Manual for European Union External Actions”.


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Lead Beneficiaries of projects that have produced a Communication Plan must submit to the MA/JTS with

the first Project Progress Report, being an additional tool to monitor the communication outputs and results

indicators.

The main goal pursued with the development of the Communication plan is to inform with the greatest

possible homogeneity the relevant addressees identified by the project, such as (list not exhaustive):

‐ relevant stakeholders

‐ policy makers at regional, local and national level

‐ general public

‐ specific media

‐ European Commission

‐ Programme bodies.

Making visible project progress, disseminating results, informing about outputs and services available

represent very positive aspects for project in order to maintain and to increase political backing, to receive

input and feedback, where possible to create links with other projects or initiatives.

In case the project envisaged and designated an information manager, he/she will be in charge for the

implementation of the communication plan and to coordinate all the communication and visibility activities

and/or proofread all publications and content to be disseminated.

Final Beneficiaries are suggested to consult the Communication and Visibility Manual for European Union

External Actions available at http://ec.europa.eu/europeaid/work/visibility.

7.2. Basic information on project communication and visibility tools

Different communication tools and channels can be identified to spread out the information about the project

(and the Programme) to reach the different target groups according to the project’s specific needs.

It is very difficult to define a particular communication tool that would be suitable for all target groups. The

choice of the most appropriate communication tool depends on:

‐ the level of engagement required

‐ the interest of target group in the message

‐ the preferences of the target group.

Independently of the used communication tool/s and channels, it is important to use always a plain language.

When communicating to an audience, the writing style should be easily understandable respecting the

following principles:

‐ to use simple, clear language that can be easily understood also by non-native speakers (K.I.S.S.

principle – Keep it Simple and Short),

‐ to be as concrete as possible – vague messages can be interpreted in different ways and can

easily lead to confusion or misunderstandings,

‐ to try to avoid undefined technical terms (jargon, acronyms, or ‘too technical-speaking’),

‐ to use personal pronouns and the active voice,

‐ to use visually appealing style (i.e. informative headings, vertical list, graphics, tables).

Creating key message/s is a good way to summarize the intent of a particular piece of writing. Key messages

should clearly convey the core of communication activity intended for the public. Key messages are not

advertising taglines or slogans, but statement that you can back up with proof and case examples, as


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described in your writing. Project should create a limited number of key messages for effective

communication. A simple formula would be:

Key message Fact Case

Effective key messages involve:

‐ details of the project

‐ the benefits of the project for the target groups

‐ a request or direction to ‘do something’ (‘call to action’) outlining what is the next step for target

groups.

Moreover it is important to ensure adequacy between chosen communication and visibility actions and the

identified target groups to whom these actions should be tailored. The use of English, being the official

language of the Programme, is suggested. However in order to tailor better the information and

communication activities to the local target group in some sort of actions (for instance, in case of construction

billboard or news publication in local newspaper), the national languages may be used.

The communication and visibility main tools can be:

‐ Project logo

‐ Project Website

‐ Events (i.e. conferences, seminars, workshops, information campaigns)

‐ Promotional materials (i.e. leaflets, brochures and newsletters)

‐ Specific publications (i.e. handbooks, guidelines)

‐ Media (i.e. press conferences, TV/radio/internet broadcasting, articles in

international/national/regional/local press)

‐ Specific materials (i.e. banners, audiovisual productions).

Basic information on some of these elements is provided below.

All these communication/visibility tools – which are also project outputs – must respect the publicity

requirements (see § of this PMCM).

Project logo

An essential element of the project visual identity is the project logo. It is recommended to create a project

logo, a recognizable graphic design which makes the project more visible, recognized and which ensures the

visibility of the project, activities and results.

If created, the project logo should appear on all public documents, publications, websites and promotional

materials during the project implementation, in order to increase visibility of the project and to facilitate the

branding of communication products.

Project Website

It is recommended to set up a project website since a good website is an excellent promotion tool able to

capture the attention of a wide number of target groups and general to the wide public.

The website should contain also relevant information in English language about the project, its progress,

contact data, project achievements and results. The website should be regularly updated during the project

lifetime. It is recommended to launch it within the first 6 months after project start and to maintain the project

website at least 12 months after the project closure, and preferably even beyond that, in order to make

available all the project results and outputs to other projects, Programme stakeholders and other interested

actors after the project closure. The name of the website shall be short and easy to trace back to the project.

The project website must contain at least:


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‐ Link to the website of the Programme

‐ Name and summary of the project

‐ Names of all Final Beneficiaries

‐ Programme logo and European flag (see the next paragraph)

‐ Disclaimer (see the next paragraph).

At the end of the project, the website should be copied on a CD-rom and transmitted to the MA/JTS with the

Final Report for possible further use in the general Programme’s communication activities and for archiving

purposes.

Events

Public events (i.e. workshops, seminars, conferences, visits, exhibitions) have the potential to raise

awareness of project or to disseminate its results to the public. These events can be useful not only to

provide information but also to receive a response from the audience.

All events should be carefully planned:

‐ Engaging highly motivated persons, responsible for staging events

‐ Defining event’s aims

‐ Planning budget

‐ Setting date, venue and time of events

‐ Preparing agenda and running sheet

‐ Writing guest list and invitations (email list)

‐ Preparing press kits and information packs for the media

‐ Structuring carefully the development of the event

‐ Writing briefing notes providing background information

‐ Arranging for catering and refreshments (if needed)

‐ Respecting always publicity requirements.

It is up to the partnership to define the number and the typology of the events according to the nature and

the topic of the project. However, it is strongly recommended to hold a public final project conference (at

least in English language) in order to inform about the final results achieved during the project

implementation.

It is also recommended to link these events with media communications (e.g. press release, press

conference).

Promotional materials

Promotional materials (such as newsletters, brochures, leaflets, binders, signs) represent a cost effective

form of communicating with the target groups.

A newsletter is an excellent tool that can be used to inform public about content and progress of project,

about the addressed topic or linked to a follow-up of specific project events. They can be delivered in hard

copy (printed) or electronically (by e-mail). Brochures and leaflets are also important promotional materials in

order to get the project’s key messages across in an effective way. While leaflets provide basic information

about the project such as mailing address or web site, brochures can be more illustrative and detailed in

conveying messages.

Any kind of promotion material should always:

‐ keep short and simple text

‐ apply the same layout each time

‐ use illustrations (i.e. photographs, graphics, diagrams), when possible

‐ use headings and headlines.


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They can be produced in paper and/or in electronic form.

In general, all material produced in paper form should also be made available in electronic form, so that it

can be sent by e-mail and posted on a web site. For material in paper version, distribution capacity (mailing

lists) should be considered.

Copies, including electronic copies of the publications should be made available to the MA/JTS through the

periodical Project Progress Reports.

Specific Publications

The project can draw up specific publication such as handbook, guideline, etc. according to its objectives

and results. It is important that they are (at least) in English language. As results shall be communicated to a

wide range of target groups, including the general public and media, these outputs may be useful for other

projects in the future or for other territories.

At least one copy of these publication shall be provided to the MA/JTS with at least the Final Report.

Media

Media relations are also important and recommended in order to communicate to the general public. Many

potential activities can be chosen such as press conferences, TV/radio/internet broadcasting, articles in

international/national/regional/local press, advertisement, etc. In order to set the basis for an effective media

communication, it is recommended to set up a contact database of relevant contact persons/journalists at the

project start.

Specific project materials

Further communication activities shall be tailored to target groups and according to the project contents,

such as:

- Promotional items (such as T-shirts, caps, pens, folders, invitations, cards/posters) can be produced

by Final Beneficiaries as supporting material for their information and communication activities in the

framework of their project.

- Photographs showing the progress of the project should also be taken where appropriate to

document the progress of the project and events related to it (its launch, press visits, press

conferences and so on) so that they can be used in communication material.

- Audio-visual material may be appropriate, but can be expensive to produce, so should only be

prepared when there is a realistic chance of being distributed by the media. However, small video

clips can be produced very simply for displaying on web sites, or publicity material.

7.4 Publicity Requirements96

All projects are required to publicize their actions and the fact they have received European funding97 when

communicating on all the matters related to the project. The Lead Beneficiaries and the Final Beneficiaries

shall respect specific requirements according to the delivered communication tools, as explained below.

96 CHAPTER II, IMPLEMENTING PROVISIONS OF REGULATION (EC) No 1083/2006, Section 1 Information and publicity, of Commission Regulation (EC) No 1828/2006 of 8 December 2006 as amended by the Commission Regulation (EC) No 846/2009 Commission Regulation (EC) has also been taken into consideration when elaborated the Programme Communication and Publicity measures. 97 For further information of European Assistance see: (http://europa.eu/legislation_summaries/enlargement/ongoing_enlargement/e50020_en.htm).


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7.2.1. Use of European flag and Programme logo

For any kind of communication and publicity materials made available as a published document or in

electronic form (word-, pdf-, ppt- or similar) as well as by electronic means and audio-visual means, project

Final Beneficiaries are obliged to prominently display:

‐ The European Flag

‐ The Programme’s logo and slogan.

The European flag has the following official colours:

- Pantone Reflex Blue for the surface of the rectangle.

- Pantone Process Yellow for the stars.

European flag can be downloaded at http://europa.eu/abc/symbols/emblem/download_en.htm in two format:

- JPEG format which allows to use the image directly in documents by using copy and paste;

- vector format or EPS (Encapsulated Postscript) which is best suited to prepress programmes for

publishing.

Whenever possible, European flag should be accompanied by the obligatory statement: “The project is co-

funded by the European Union, Instrument for Pre-Accession Assistance” (as the box below shows):

The project is co-funded by the European Union, Instrument for Pre-Accession Assistance.

Only in exceptional cases, such as small promotional materials, the statement can be left off.

Programme logo consists of:

- the picture mark symbolizing regions and countries participating in the Programme,

- the name of the Programme

- the flags of participating countries.

It can be downloaded at the Programme website in two format:

- JPEG format which allows to use the image directly in documents by using copy and paste;

- vector format or EPS (Encapsulated Postscript) which is best suited to prepress programmes for

publishing.

Moreover it has been produced with and without the slogan of the Programme ‘Let’s grow up together’:

Programme logo version with slogan - preferred version

Programme logo version without slogan.

The preferred version of the Programme logo is full colour design in the version that includes the Programme

slogan ‘Let’s grow up together’98.

98 See Annex II of the PMCM.


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Independently of the chosen Programme logo version, the slogan of the Programme ”Let’s grow up

together” can be used also separately according to the space available.

As general rule, the Programme logo must be in proportion to the design to which it applies. It should be

placed on the first page or equally prominent place. A clear space must surround the Programme logo on all

sides and not be impinged on by graphic elements, other logos, edge of page or advertisement.

Finally, both these logos must not be distorted or any additions to them must be avoided. In particular:

- the colours of the letters, of the flags shall not be changed

- the logos shall not be rotated

- other possible logo/s to be used shall not be incorporated in them but must be presented separately

one from another.

7.2.2. Disclaimer

The European Union, the Managing Authority or any other Programme body is not responsible for the

content of the communication material delivered by the Lead Beneficiary and/or by any Final Beneficiary.

Therefore, according to the space available in the project documents (e.g. publications, CDs, websites, etc.)

the following disclaimer must be included:

“This < document/publication/etc > has been produced with the financial assistance of the IPA Adriatic

Cross-Border Cooperation Programme. The contents of this < document/publication/etc > are the sole

responsibility of < Final Beneficiary's name > and can under no circumstances be regarded as reflecting the

position of the IPA Adriatic Cross-Border Cooperation Programme Authorities”.

7.2.3. Specific requirements for plaques and billboard

Permanent plaques and billboard are an effective way of acknowledging the involvement of the EU in the

construction or planning of permanent structures such as houses, clinics, factories, institutions, training

centres, etc.

As part of the opening ceremony of permanent structures co-funded by the Programme, Final Beneficiaries

must place a permanent plaque in the most visible part of the building (such as the main entrance or in front

of the building) that is visible and of significant size.

Additionally, projects which foresee investment/s, are required during the implementation of the project to

display billboard describing the project for all infrastructure-related activities. The display billboard shall be

put on the site of each construction-related activity and be clearly visible so that those passing are able to

read and understand the nature of the action. When the project is completed, the billboard shall be replaced

by an explanatory plaque that is visible and of significant size no later than six months following the

completion of the project and which must remain in place for at least five years after project end.

The required plaques and billboards must include:

- the European flag and the Programme logo with the abovementioned statement, where the size of

these logos shall take up at least 25% of the billboard or plaque

- the name of the project

- the amount of the Community contribution99

- the name of the Beneficiary

99 The amount to be indicated is the Community contribution (thus IPA contribution) received for the realization of the investment and not the total project budget (or total Community contribution) assigned to the Final Beneficiary or the whole project, since the explanatory plaque has to provide information only on the contribution received for that specific investment (“for all infrastructure-related activities”).


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- start and end date of the project

- the following sentence: “This [name of the structure] has been produced with the financial assistance

of the IPA Adriatic Cross-Border Cooperation Programme”100.

If it is not possible to place a permanent explanatory plaque on a physical object, other appropriate

measures shall be taken in order to publicize the Community contribution.

Final Beneficiaries are also encouraged to produce a display panel to promote their EU funded project at an

exhibition or event, or at the entrance of a training centre or office reception. The shape, size and

dimensions of panels vary depending on the amount of information that needs to be conveyed, and whether

the panel is intended to be portable or permanent. Low-cost panels can be made using self-adhesive

lettering.

7.2.4. Specific requirements for project equipment

Every single piece of equipment, co-funded by the present Programme, must be labelled with a sticker as

the figure shows below. The sticker has to be made out of adequate material, and its size has to be adjusted

to the size of the equipment.

Sticker has to remain on visible and accessible spot of the equipment or nearby for at least five years after the end of the project, thus it has to be durable.

100 In case of use of the national language, this sentence should be inserted in national language.

<Project Title (and/or Acronym) and code> < if applicable the bookkeeping inventory number >

The project is co-funded by the European Union, Instrument for Pre-Accession Assistance


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8. PROJECT CLOSURE

Once the project ends (see § 5.2), several obligations arising from the Programme, the Community and the

national legislation still apply.

8.1. Final Report

After finalisation of the project Lead Beneficiaries must submit a Final Report to the Managing Authority not

later than 6 months from the Project expiration term (end date), giving a qualitative summary of the

project as a whole.

This report, which replaces the last Project Progress Report, shall provide an overview of the project’s

activities and achievements. It should also highlight how cross-border cooperation has contributed to

attaining the expected results and should include a detailed description of the measures foreseen in order to

ensure their durability. In addition it should contain financial information about all certified expenditures

(DVEs).

As the Project Progress Report, the Final Report shall contain:

o report detailing all project activities as a whole, achievement of outputs and results; deliverables

produced and

o financial reporting regarding all project certified expenditures and application for reimbursement;

o relevant enclosures as communication and publicity documents.

Final Beneficiaries must be aware that disbursement of the last Programme contribution instalment

is subject to the submission of the Final Report.

The Final Report must be filled in English on compulsory, pre-filled templates provided by the Joint Technical

Secretariat101 and it has to be submitted to the JTS both in original hard copy and electronically.

The electronic version (excel format) must be sent via e-mail to [email protected], whilst the paper

version with all the relevant enclosure must be sent via normal mail/courier duly signed and stamped to the

JTS premises.

The figure below shows the different steps of the cash flow during reimbursement procedure:

Steps of the final reimbursement after the project end

1 Transmission of the last Progress Report by every FB to the competent FLCO within 45 (calendar) days from the ending date of the implementation period of the project.

2 Verification of the Progress Reports by the competent FLCO.

3 Declarations on Validation of Expenditure issued by the FLC and transmitted to FB and through the MIS also to LB, MA and CA.

4 Elaboration and submission of the Application for Reimbursement (AR) by the LB.

5 Submission of the Final Report by the LB.

6 Verification by the MA/JTS of the submitted AR and Final Report.

7 Order of payment issued by the MA to the Programme Treasury for making reimbursement to LB.

101 Templates will be available in the Project Management Toolbox.


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8.2. Durability and ownership of the project outputs

According to the IPA Subsidy Contract, Final Beneficiaries are the owners of the intellectual and industrial

property rights on the Project's results, reports and other documents relating to it. Where several members of

the partnership (Lead Partner and/or PPs) have jointly carried out work generating outputs and where their

respective share of the work cannot be ascertained, they shall have joint ownership of it/them. Within the

Partnership Agreement Final Beneficiaries may establish provisions regarding the allocation and terms for

exercising that joint ownership. The proofs of transfer of ownership rights to the owners shall be anyway

annexed to the Final Report.

Notwithstanding, following the provisions of the Programme Visibility rules, the publication of information by

Programme or National Authorities/Coordinator or the European Commission, in order to guarantee their

widespread publicity and to make them available to the public, may not be considered as a breach of

industrial and intellectual property rights or a breach of confidentiality clause if the publication does not affect

the Final Beneficiary’s commercial secrets.

The produced outputs of the project cannot be transferred or be substantially modified within five years after

the project end date. More in detail, the project must not undergo any substantial change:

o affecting its nature or its implementation conditions or giving to a firm or a public body an undue

advantage; and

o resulting from a change in the nature of ownership of infrastructure or the cessation of a productive

activity.

Should any of the above conditions not be met by any of the Final Beneficiaries, the Managing Authority

must be informed without delay. This might imply a recovery of funds unduly paid.

8.3. Storage of project documents and accounting records

All accounting and supporting documents (e.g. Project Application Form, IPA Subsidy Contract, reports,

service contracts, public procurement documentation, rental contracts, important communication between

the project partners and with the Programme bodies as well as documents required to ensure an adequate

audit trail, documents related to expenditures as e.g. original invoices and controls and audits) must be

available and accessible until three years after the Programme closure (at least 31.12.2021) unless stricter

national rules/state aid regulation102 do not state a later date.

Official documents related directly to the communication with the Programme authorities shall be archived by

the Lead Beneficiary, whilst the reporting and supporting documents related to the Final Beneficiaries must

be kept at the Final Beneficiaries’ premises for an equal period of time. The documents can be kept either in

the form of original copies or in a version in conformity with the original, as commonly accepted data carriers.

The procedure for the certification of the conformity of these documents held on data carriers with the

original documents must be in line with the provisions set by the national authorities and shall ensure that the

versions held comply with the national legal requirements and can be relied on for audit and control

purposes.

In case of retaining the documents electronically, internationally accepted security standards must be met.

Representatives of the Managing Authority, Joint Technical Secretariat, First Level Control Offices, Certifying

Authority, Audit Authority, authorized officials of the Community and their authorized representatives,

European Commission and the European Court of Auditors are entitled to examine the project, all relevant

documentation and accounts of the project also after its closure.

102 FB should retain the de minimis funding documentation for 10 years.


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8.4. Other considerations

8.4.1. Costs for project closure

In order to be eligible, all implementation-related costs must be paid by Final Beneficiaries within one

month after the end date of project implementation as well as all costs related to the elaboration and

submission of the Final Progress Report and to the project closure activities. In any case, if the project

implementation period ends on 31 December 2016, all payments must be concluded within the same

deadline (for Serbian FB, all payments must be concluded until 31 December 2015).

8.4.2. Revenues after project closure

If, no later than the closure of the Programme, should the project be identified as revenue-generating in

accordance with the definition provided in § 4.7.3 of the PMCM, the Managing Authority is entitled to ask for

refunding to the Programme in proportion to the contribution from the funds.


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Annex I Addresses of the First Level Control Office

in each participating Country in the IPA Adriatic CBC Programme.

Albania First Level Control in the Ministry of Integration

Rr."Papa Gjon Pali II", 3 – Kutia Postare nr. 8302 Tirane, Shqiperi / Albania

Bosnia and Herzegovina

Ministry of Finance and Treasury – Central Financing and Contracting Unit (CFCU)

Trg Bosne i Hercegovine 1, 71 000 Sarajevo / Bosnia and Herzegovina

Croatia Ministry of Regional Development and EU Funds – Directorate for Budget and Finance

Račkoga 6 -10000 Zagreb / Croatia

Greece Unit D "First Level Control Unit" – Single Paying Authority of CFS, Ministry of Development, Competitiveness Infrastructure, Transport and Networks

Navarchou Nikodimou, 11 & Voulis, 105 61 Athens / Greece

Montenegro Ministry of Finance – Sector for finance and contracting of the EU assistance funds (CFCU)

Stanka Dragojevica 2 -81 000 Podgorica / Montenegro

Italy Abruzzo Region – Servizio Cooperazione Territoriale - IPA Adriatic – Ufficio Controllo I livello

Via Salaria Antica Est, 27 – 67100, L’Aquila / Italy

Serbia Ministry of Finance – Sector for Contracting and Financing of EU Funded Projects (CFCU)

Kneza Miloša, 20, 11000 Belgrade, Serbia

Slovenia

Government Office for Development and European Cohesion Policy/ European Territorial Cooperation and Financial Mechanism Office/ Control division - ETC, IPA and IFM Programmes

Kotnikova 5, 1000 Ljubljana, Slovenia


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Annex II Guidance on the use of the Programme logo

Logo’s colours

Blue "Adriatic" Light blue Programme logo can be produced in full colour according to the percentages

indicated below. When the logo is produced with processes that are different from printing, it is necessary to

convert the colours in to the equivalent chromatic code. In the table you will find the PMS codes

(PANTONE® COLOR BRIDGE™ coated EURO) useful for plain colours, the colour conversion values for

four colour printing or in black and white.


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Proportions

The use of the horizontal version is advised. The logo should be used only on original digital supports

released from the appointed office. Copies produced by other sources, or that are scanned from the

examples that will follow in this document, are to be avoided.

It is recommended that the space around the logo is wide enough. The minimum spacing to maintain

between the logo and other elements (text, illustrations, pictures) is defined by the height of the vertical line


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of the letter “A”, as in the image above. This is the minimum space to be considered therefore, when

necessary, it should be increased.

Minimum size

The Programme logo is readable even at minimum dimensions. It is advisable not to use a base that is lower

than the one indicated below:

Black & white versions:

It is recommendable to use the colour version of the logo. The black and white version is used only when the

printing colour is black (e.g.: newspaper, fax, laser printing or black and white ink-jet) and when it is not

possible to use the coloured version. The vector positive colour version is to be considered as an alternative

to the black and white version and should be used only when the printing cannot be of a high quality

standard (e.g. minimum dimension of printing).


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Combination with other logos

The minimum spacing to maintain between the Programme logo and other logos is defined by the area

around. This is the minimum space to be considered therefore, when possible, should be increased.


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Mistakes to avoid

It is important to avoid some mistakes in using the Programme logo such as to modify the composition, or

the internal proportion of the logo; to change the shape of the logotype; Modifying the typographic characters

or the institutional colours of the logo; to ignore the areas of respect and the position of the logo’s correct

alignment; to ignore the different versions of the logo; to apply the logo in an unreadable way.


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Examples of logo use